Uganda Receives First Batch Of Petroleum Imports Via Mombasa

The Uganda National Oil Company (UNOC) has successfully received its inaugural shipment of tons of petrol and diesel at Kipevu Oil Terminal II in Mombasa.

At dawn on Wednesday, a ship carrying 58,000 metric tonnes of petrol was the first to dock, setting the stage for a seamless transfer into Kenya Pipeline Company (KPC) infrastructure bound for Kisumu and onward to Uganda.

Anticipation peaked as another vessel, laden with 65,000 metric tonnes of diesel, prepared to arrive at midnight, marking a pivotal moment after extensive negotiations with Kenyan authorities.

UNOC’s role as the sole importer of petroleum products was solidified by the passing of the Petroleum Supply (Amendment) Act 2023, which granted the company exclusive rights to import and supply all petroleum products into Uganda.

This strategic move is expected to stabilise pump prices in the local market. Previously, oil marketing companies directly sourced petroleum products from Kenya.

UNOC entered into a contract with Vitol Bahrain, a bulk petroleum trader in the Middle East, to supply petroleum products up to the port of Mombasa. From there, UNOC will handle the sale and distribution to oil marketing companies in Uganda.

Monthly shipments are planned to meet Uganda’s fuel demand, which currently stands at seven million litres daily, with an expected annual growth rate of 7%-9%.

Tony Otoa, UNOC’s Chief Corporate Affairs Officer, said that this is a breakthrough for the country, as they are committed to ensure that there is a constant and timely supply of petroleum products to Ugandans.

“We hope to address the forces of supply that have an impact on the pump prices. We will adequately supply all operators in Uganda.”

Captain Patrick Onyango, the manager of marine oil terminals in Kenya, gave assurances that everything was in place handle of all UNOC’s consignment.

“On behalf of Kenya, our terminal is ready to handle the Ugandan products imported by UNOC. We have prepared ourselves for this, and are ready to execute,” he said.

“I want to assure our partners UNOC and Ugandans at large, that we will ensure that the products coming through our facilities meet the standards and of quality. We will also ensure that they get to Kisumu on time,” he said.

UNOC’s takeover of the importation process is seen as a strategic move to eliminate middlemen, ensure a more stable and predictable fuel supply chain, and potentially lower pump prices. The company aims to address supply-side issues that have historically caused fluctuations in fuel prices.

In May 2024, Uganda and Kenya signed key agreements, which paved the way for UNOC to utilise KPC facilities to import petroleum products into the country.

With this new arrangement, all petroleum dealers in Uganda will now buy directly from UNOC, not Kenyan middlemen. This change is expected to create a more stable and predictable fuel supply chain, ultimately benefiting the Ugandan economy.