Kenya has lost its dominant role as Uganda's primary oil import route, as the Ugandan government, in collaboration with Vitol Bahrain E.C., a Bahrain-based company, has decided to pivot towards the port of Dar es Salaam in Tanzania.

This strategic shift comes as part of an effort to foster stronger economic relations between Tanzania and Uganda and follows closely on the heels of Vitol Bahrain E.C. obtaining a permit from the Uganda National Oil Company (UNOC) to supply oil within Uganda.

Uganda has long relied on Kenya for approximately 90 per cent of its fuel imports, but recent developments have raised concerns in Uganda.

The Ugandan government argues that Kenya's decision to enter into a government-to-government fuel deal with two Gulf nations was made without consultation, leaving Uganda uninformed and raising worries about the vulnerability of its fuel supplies and the potential for increased pump prices.

In response to these concerns, Ugandan Energy and Mineral Development Minister Ruth Nankabirwa Ssentamu has announced the successful negotiation of a five-year contract between UNOC and Vitol Bahrain E.C.

Read More

  1. Bolt unveils new grocery delivery service to tap into growing Kenya market
  2. World Bank cuts Kenya's 2024 economic growth projection by 0.3 per cent
  3. Full details of new emergency response protection for tourists traveling in Africa

Under this partnership, Vitol Bahrain E.C. will finance the operations, supported by its substantial global balance sheet, and will work closely with UNOC to ensure competitive pricing of petroleum products.

Additionally, Vitol Bahrain E.C. has pledged to fund the construction of extra storage capacity in Namwambula, Mpigi, providing an additional 320 million litres of storage in collaboration with UNOC.

Nankabirwa expressed confidence in the partnership with Vitol Bahrain E.C., praising the company's impressive financial strength, with a 2022 turnover of $505 billion, its status as an independent global trader, and its strong regional presence.

She also underscored the company's commitment to enhancing UNOC's capabilities.

Earlier this year, the Ugandan government made the strategic decision to empower UNOC to bolster the country's product stock-holding levels.

This move is part of an effort to contribute to the stabilization of consumer and retail fuel prices, aligning with the revised 2003 Petroleum Supply Law, updated in 2023.

The choice of the port of Dar es Salaam as the new gateway for oil imports marks a significant shift in the dynamics of fuel supply for Uganda.

This partnership, supported by the financial backing and expertise of Vitol Bahrain E.C., is expected to enhance Uganda's energy security and provide competitive fuel prices for its citizens, all while advancing the goals set out in the revised Petroleum Supply Law of 2023.