In a significant move to resolve a long-standing dispute, Kenya has agreed to allow Uganda's state oil company to import petroleum products through its port of Mombasa. This decision, announced by Kenya's energy minister in a local newspaper on Thursday, marks a crucial step in improving diplomatic relations between the two nations.
After decades of having its oil retailers obtain their cargo through affiliated companies in Kenya, Uganda has been looking for alternative ways to import its petroleum products, including through a port in Tanzania.
"You will see UNOC (Uganda National Oil Company) getting a license, and then we will see how to work together," Kenya's Energy Minister Davis Chirchir told the Business Daily newspaper.
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Under the new agreement, Uganda's state oil company, UNOC, will use the Kenya Pipeline Company to transport its petroleum products. This arrangement not only allows Uganda to secure a new import route but also ensures that Kenya continues to benefit from the trade, fostering a mutually beneficial relationship between the two nations.
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In 2022, Uganda, a landlocked country, imported petroleum products worth $1.6 billion, primarily from the Gulf. Some 90% of the products are imported through Kenya.
It declared in November that it intended to give a division of the international energy trader Vitol the sole right to supply all petroleum products.
According to the government at the time, the use of Kenyan companies for oil imports "exposed Uganda to occasional supply vulnerabilities where the Ugandan retail companies were considered secondary whenever there were supply disruptions," affecting retail prices.
Kenyan media outlets reported that during their meeting in Uganda last month, President William Ruto of Kenya and President Yoweri Museveni of Uganda decided to end their disagreement over oil imports.
