 |
| (Photo Credit: monitor.co.ug) |
In September, Kenya declined Uganda's request to use its pipeline for the transport of fuel, citing concerns that this move would displace local oil marketing companies (OMCs) from utilizing the pipeline. As a consequence, Uganda has inked a five-year deal with Vitol Bahrain E.C to exclusively supply all its fuel needs starting January 1, 2024. Currently, Kenya supplies about 90% of Uganda’s fuel, with the remaining 10% sourced through Tanzania.
Shop With Us: https://www.etsy.com/shop/SokoMalls
Following this development, the State-owned Uganda National Oil Company (UNOC) sought registration as an OMC in Kenya, alongside permission to import and export fuel and leverage Kenya Pipeline Company’s (KPC) pipeline. However, the application was declined by Kenya’s Energy and Petroleum Regulatory Authority (Epra) due to UNOC's inability to meet several key requirements.
READ ALSO: Moussa Dadis Camara Returned To Jail After Kidnap From Prison
Epra's decision was based on UNOC's failure to substantiate the necessary annual sales volumes and operational capacity within Kenya. Specifically, UNOC could not demonstrate a minimum annual turnover, as well as evidence of operating licensed retail stations and depots in Kenya. In light of this, the government of Uganda has reportedly sought special waivers from the President, Dr. William Ruto, to address these regulatory hurdles.
Granting UNOC the requested approvals by Epra would have potentially displaced Kenyan companies from their allocations by KPC, which posed a significant challenge to local OMCs. The current allocation within the KPC system is primarily owned by oil marketers, and reallocating it to UNOC would be viewed as nationalization, potentially infringing upon the property rights of established oil marketers in the region.
Follow Us On Facebook: https://web.facebook.com/bfmnetwork
As Uganda's agreement with Vitol approaches, discussions between Uganda and Kenya are ongoing in pursuit of a mutually acceptable resolution. The outcome regarding whether Kenya will provide concessions to UNOC for utilizing KPC’s facilities to transport its fuel remains uncertain.
This impasse is a crucial point of contention, given the impending commencement of fuel deliveries to Uganda and the need for a harmonious solution between the two nations. It remains to be seen how the situation will unfold and whether an agreement can be reached to address these complex energy transportation issues.
READ ALSO: IMF Proposes 50% Quota Increase For Member Countries, Including Ghana
Comments
Post a Comment