Kenya Pleads With Uganda To Continue Importing Fuel Through Mombasa Port Over Dar Es Salaam

• Uganda, through the Uganda National Oil Company (Unoc), is set to commence direct fuel imports this month following a recent agreement with Vitol Bahrain
• The landlocked country has signalled a shift in its port preference, opting for Dar es Salaam after experiencing discord with Kenya
• Kampala's decision marks a notable change in its fuel import strategy as it diversifies its trade routes in the aftermath of strained relations with Nairobi

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Kenya has earnestly appealed to Uganda to persist in importing fuel through the Mombasa Port, bypassing the alternative route via Dar es Salaam.

Uganda, through the Uganda National Oil Company (Unoc), is set to commence direct fuel imports this month following a recent agreement with Vitol Bahrain.

The landlocked country has signalled a shift in its port preference, opting for Dar es Salaam after experiencing discord with Kenya.

Kampala's decision marks a notable change in its fuel import strategy as it diversifies its trade routes in the aftermath of strained relations with Nairobi.

The Daily Monitor reported that the two countries were engaged in high-level talks via respective ministries.

"Unoc has been authorised under the amended Petroleum Supply Act to source and distribute petroleum products to all licensed oil marketing companies in Uganda, starting from January 1, 2024. This new mandate includes maintaining and optimising the existing oil supply routes, both through Kenya and Tanzania, Uganda's Ministry of Energy and Mineral Development stated.

Why Uganda fell out with Kenya over oil deal

After Kenya entered an oil import credit deal with three oil-producing companies in Saudi Arabia and the United Arab Emirates (UAE), Uganda argued it was exposed to supply vulnerabilities leading to high prices.

"Uganda oil marketers are being considered secondary in cases of supply disruptions. These saw the country receiving relatively costly products impacting the retail pump prices, the country's Energy Minister Ruth Nankabirwa said.

The country sources 90% of its petroleum products through the port of Mombasa and 10% through the port of Dar es Salaam.

Why Uganda took Kenya to court

Uganda sued Kenya at the East African Court of Justice to seek redress in the disputed oil importation deal.

Court documents submitted through Uganda's Attorney General claim that Kenya had blocked the Energy and Petroleum Regulatory Authority (EPRA) from granting it a licence to import oil through Mombasa Port.

The landlocked country stated that the government-to-government oil deal signed with the Kenya Kwanza administration in early 2023 permitted them to import oil through the Kenya Pipeline Limited Company.