Why Uganda chose to import oil through Mombasa and not Dar
Real Estate
By
Patrick Beja
| Jul 25, 2024
On Friday last week, the big galleon, Mt Navig 8 Martinez, rolled from the high seas into the port of Mombasa amid great pomp.
Inside its tanks were 58,000 metric tonnes of petrol destined for Uganda from the Middle East. Welcoming the ship was a huge delegation of Ugandans led by Minister for Energy and Mineral Development Ruth Nankabirwa.
The Uganda National Oil Company (UNOC) asserted that it has full confidence in importing oil through Mombasa Port, pouring cold water on previous reports that Uganda has decided to use the port of Dar Es Salaam for its oil imports.
However, the Ugandan delegation raised concerns over the ongoing protests in Kenya which are affecting the flow of goods through the Northern Corridor.
It is the first fuel consignment that was imported by UNOC since its formation in 2015 for distribution to oil marketers in that country to lower the prices of petroleum products.
While Kenya celebrates Uganda's decision to use Mombasa Port, the direct importation of petroleum products by Uganda has locked out many Kenyan oil marketers who supplied that country with the products.
Uganda has designated UNOC as the sole supplier of petroleum products following a change of legislation in that country.
Ugandan and Mombasa port officials who received the first such ship said the second vessel, Mt Sinbad, was expected to dock with 65,000 metric tonnes of diesel.
Uganda reportedly chose Kenya over Tanzania in the bulk importation of fuel because of the modern handling equipment at Kipevu Oil Terminal that opened in 2022.
Ms Nankabirwa said that the direct shipment of petroleum products would lower the pump prices and ensure faster fuel delivery and consistent supply.
She said Uganda planned to fast-track the construction of a fuel storage facility and a refinery with UNOC, a state agency, taking the lead.
The minister said Uganda had to ensure the safety and security of supply and quality of products.
"The importation of petroleum products through Kenya will further cement our regional federation," she said. "UNOC will ensure logistics costs of oil importation to come down. UNOC is there to cushion consumers."
Mr Liban said it has taken 12 months to address the hurdles and ensure that Uganda imported oil directly through the port of Mombasa.
He said it took the political goodwill of the presidents of Kenya and Uganda to issue a license to UNOC and sign an agreement to ensure the importation of fuel kicked off.
"We now have a planning committee and vessel schedule committee in place to ensure safety because these products are hazardous," he said.
Captain Ruto said the first consignment of Uganda fuel imported through the Port of Mombasa marked a significant achievement.
"We are proud to be associated with this development which also signifies our government's commitment to excellence and innovation in the oil and petroleum industry," he said.
He said the operationalization of the new KOT has streamlined marine oil terminal operations, created synergy, and enhanced safety and operational excellence.
"This has enhanced the provision of quality services that meet world-class standards and provided an avenue to optimize resources to reduce petroleum tanker vessels' delays, improve turnaround time, and eliminate demurrage," he said.
He said the new KOT has greatly boosted capacity in handling oil and petroleum products, significantly easing the pressure aggravated by increased demand in the region.