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Kenya Gives Greenlight to UNOC to Start Importing Petroleum Products

L-R: PS Irene Pauline Bateebe, Outgoing State Minister for Energy (Minerals) Peter Lokeris hands over office to incoming Minister of State Phiona Nyamutoro as Dr. Ruth Nankabirwa Sssentamu looks on. Photo by Dominic Ochola

The Uganda National Oil Company – UNOC will effective May 2024 start importing petroleum products into the country. This is after the Kenyan government agreed to award it a certificate of incorporation, the Minister of Energy and Mineral Development has said.

It follows a meeting between Kenya’s President, Dr. William Ruto, and Ruth Nankabira Ssentamu, the Minister of Energy and Mineral Development in Nairobi on Monday. The meeting comes after Uganda was denied usage of the Kenya Pipeline Company – KPC facility to move its refined petroleum products from Mombasa Port.

In September 2023 UNOC applied to the Energy and Petroleum Regularity Authority – EPRA of Kenya to be registered as an Oil Marketing Company – OMC to allow it to import and export fuel like other Kenya’s OMCs and utilize KPC infrastructure but the application was turned down.

EPRA declined UNOC’s application because the State-owned Company could not meet its requisite standards to be awarded the necessary license to function as an oil importer. But also granting a UNOC license would displace Kenyan companies and create unnecessary competition but Uganda protested EPRA’s decision and sued Kenya at the East African Court of Justice.

However, Nankabirwa revealed that following the meeting, President Ruto intervened and brokered an out-of-court settlement giving UNOC the leeway to begin operating. Proscovia Nabbanja, UNOC’s Chief Executive Officer, and other officials from the Ministry of Energy are in Nairobi to get the certificate of incorporation.

Nankabirwa told our reporter on Thursday that by beginning to import petroleum products into the country, apart from reduced pump price of oil, UNOC is expected to gain the necessary experience in the oil industry as Uganda awaits to begin pumping its first oil and gas from the refinery by 2025.

Up to 90 percent of Uganda’s fuel supplies come from Kenya while 10 percent is imported through neighbouring Tanzania. According to Nankabirwa, Uganda will maintain the Tanzanian route for security reasons and reduce logistical expenditures that raise the prices of petroleum products on the Ugandan market.

Minister Nankabirwa was speaking to journalists during a handover ceremony at the Ministry Headquarters in Kampala on Thursday. The outgoing Minister of Energy (Minerals), Peter Lokeris is now Minister of Karamoja Affairs handed over office to Phiona Nyamutoro.

Currently, Uganda does not have a direct pipeline from Dar-es-Salam, and all fuel transportation is made by road partly through the lake via Mwanza over a distance of 1,500km from Dar to Mutukula border post making the route very costly.

Meanwhile, Uganda and Tanzania on Tuesday registered yet another key milestone after Dr. Nankabirwa and her counterpart, Dr Doto Biteko, Tanzania’s Deputy Prime Minister and Minister of Energy commissioned the East African Crude Oil Pipeline (EACOP) Coating plant, burrowed at Sojo village, Nzege District in Tabora Region.

-URN

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