Overview:
Davis Chirchir, Kenya’s Cabinet Secretary in charge of Energy and Petroleum, was quoted as saying that UNOC will use Kenya Pipeline Company’s infrastructure as it imports oil via the Kenyan port of Mombasa.
Kenya has granted a license to Uganda’s National Oil Company (UNOC) to import petroleum products via Mombasa, ending a dispute that had threatened to damage diplomatic relations between the two neighbours.
Davis Chirchir, Kenya’s Cabinet Secretary in charge of Energy and Petroleum, was quoted as saying that UNOC will use Kenya Pipeline Company’s infrastructure as it imports oil via the Kenyan port of Mombasa.
“You will see UNOC getting a licence and then we will see how to work together because usage of our pipeline is an opportunity for us,” he said.
The licence was granted by Kenya’s Energy and Petroleum Regulatory Authority (EPRA).
In the past, Uganda has been importing fuel from Kenya through Kenyan companies and middlemen.
However, last year, Uganda changed the oil importation law, granting UNOC exclusive power to import oils. Later, in justification, President Museveni accused Kenyan middlemen of inflating fuel prices by up to 58%.
But Kenya refused to grant UNOC a licence on grounds that UNOC has failed to comply with the law. EPRA cited UNOC’s failure to show proof of owning a licensed petroleum depot and at least five retail stations in Kenya.
This forced Uganda in November to drag the neighbour to the East African Court of Justice.
As part of the licence, Uganda National Oil Company has alredy started selling petroleum products to oil marketing firms in Tanzania and Uganda as it tests the market ahead of rolling out a direct import deal with Vitol Bahrain.
Unoc is set to start directly importing from Vitol Bahrain under a five-year deal, as Uganda moves to end decades of relying on Kenyan oil marketing companies (OMCs) for supply of fuel.
Vitol is a Switzerland-based Dutch oil multinational. It partly owns the Fujairah Refinery in the United Arab Emirates (UAE).