By In a landmark event for Uganda’s petroleum industry, the Uganda National Oil Company (UNOC) received its first direct consignment of petroleum products at the port of Mombasa on July 3. This inaugural shipment, consisting of two tankers carrying 70,000 tonnes of refined petroleum, ends the long-standing monopoly of Kenyan oil marketers and marks a new chapter of energy independence for Uganda.
The Minister for Energy and Mineral Development, Hon. Ruth Nankabirwa, was present to witness this historic occasion. Expressing her enthusiasm on social media, she highlighted the strategic shift in Uganda’s petroleum importation approach. “Today in Mombasa, Kenya, I was honoured to commemorate the commencement of direct importation of refined petroleum products by UNOC,” she stated.
Transitioning from a government-to-government (G2G) arrangement to direct importation by UNOC is expected to bring initial operational challenges. However, Minister Nankabirwa expressed confidence in overcoming these challenges through cooperation with the Kenyan government and relevant authorities. She emphasized the ministry’s commitment to maintaining the quality and continuity of petroleum supply to Uganda, ensuring adherence to scheduled deliveries without disrupting the Kenya pipeline system’s performance.
This consignment’s arrival is part of a broader agreement with Vitol Bahrain, aimed at reducing pump prices below those currently offered in Kenya. This deal not only aims to lower fuel costs but also strengthens economic ties between Uganda and Kenya. The Kipevu Oil Terminal 2 (KOT2) in Mombasa, where the tankers docked, is a state-of-the-art facility managed by the Kenya Ports Authority (KPA). It has recently undergone extensive upgrades to increase its capacity and efficiency. According to KPA Managing Director Capt. William Ruto, the terminal can handle up to four vessels simultaneously and is equipped with modern infrastructure to support diverse petroleum products.
Despite concerns about the impact on local Kenyan oil firms, KPA assures there will be no revenue losses for the Kenya Pipeline Company (KPC). The agreement allows UNOC to use KPC’s storage and transport facilities, ensuring a seamless supply chain from Mombasa to Uganda. This arrangement benefits Uganda while aligning with Kenya’s strategy to optimize its port facilities and boost regional trade.
The partnership between UNOC and Vitol Bahrain involves maintaining both Kenyan and Tanzanian routes, with a preference for the Kenyan route due to its proximity and significant port infrastructure investments. This strategic choice reinforces Mombasa’s importance as a central hub in East Africa’s energy sector. Additionally, UNOC is tasked with ensuring the security of petroleum supply within Uganda, working closely with Ugandan Oil Marketing Companies (OMCs) that meet stringent financial and operational standards to participate in this new importation framework.
