Museveni Withdraws Key Trade Deal With Kenya

Uganda has announced that it will cease reliance on Kenya for sourcing petroleum product citing challenges occasioned by Kenya’s govt-to-govt fuel deal with the Gulf.

Currently, over 90.0% of Uganda’s product is sourced through the Port of Mombasa, the rest through Port of Dar es Salaam

Yoweri Museveni’s administration now says Kenya’s govt-to-govt deal has exposed the economy to occasional supply vulnerabilities where the Ugandan OMCs were considered secondary whenever there were supply disruptions.

Uganda has stated that these vulnerabilities paused additional challenges, resulting in Uganda receiving relatively costly products and ultimately impacting the retail pump prices.

On Oct 23rd, 2023 Uganda’s cabinet approved amendment of the Petroleum Supply Act, 2003 through the Petroleum Supply (Amendment) Bill, 2023 & has transmitted the bill to Parliament for approval

The government has effectively mandated Uganda National Oil Company Limited to source and supply the petroleum products to the licensed Oil Marketing Companies.

UNOC and Vitol Bahrain E.C. have negotiated a 5 year contract, where the latter will be financing the business by providing a working capital facility backed by its balance sheet and working with UNOC to ensure competitive pricing of petroleum products.

Further loss for Kenya as Uganda says that to guarantee the security of supply, it will ensure that there will be buffer stocks in Uganda & Tanzania (not Kenya) to be called upon should there be supply disruptions to the Country.