DAR ES SALAAM: UGANDA has begun importing petroleum products through Dar es Salaam Port, marking a significant shift in its fuel supply strategy.
This change comes in response to new restrictions imposed by Kenya on the volume of fuel Uganda can import through the Kenya Pipeline Company (KPC).
The move, which saw Uganda receive its first shipment of 18 million litres of fuel this week, equivalent to approximately 520 tanker trucks, aims to alleviate supply issues caused by Kenya’s constraints on fuel imports.
Kenya’s Ministry of Energy and Petroleum recently restricted the amount of fuel Uganda can import through the Kenya Pipeline Company (KPC) system.
In a letter to Uganda’s Ministry of Energy and Mineral Development, the Kenyan ministry cited system constraints and set a maximum cargo size of 58,000 metric tonnes for Premium Motor Gasoline (PMS) and 65,000 metric tonnes for Automotive Gas Oil (AGO).
The Sustainable Energies & Petroleum Association of Uganda (SEPA) expressed concerns about the impact of the restrictions on Uganda’s fuel supply.
In a letter to the Uganda National Oil Company (UNOC) Chief Executive Officer, SEPA General Manager Anthony Ogalo noted that the current import volumes are insufficient to meet the country’s demand, which is approximately 80,000 metric tonnes for each product grade.
“We note with concern that the current imports by UNOC of PMS (58,000 metric tonnes) and AGO (65,000 metric tonnes) are insufficient to meet the current market demand,” said Mr Ogalo.
He warned of potential product shortages and urged UNOC to increase import volumes to prevent stockouts.
In response to these challenges, Uganda plans to progressively increase the volume of fuel imported through Dar es Salaam, aiming to divert approximately 36 million litres monthly (1,028 truckloads) from the KPC system.
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This strategy is part of Uganda’s broader effort to reduce its dependence on Kenyan oil marketing companies (OMCs) for fuel supply.
UNOC has entered into a five-year agreement with Vitol Bahrain to import fuel directly, marking a significant departure from Uganda’s long-standing reliance on Kenyan suppliers.
The dispute with Kenya emerged after Nairobi signed a government-backed deal to import fuel on credit from three Gulf oil majors.
Uganda imports an average of 2.5 billion litres of petroleum annually, valued at 2 billion USD, with KPC handling the majority of the cargo.
By choosing Dar es Salaam Port for petroleum importation, Uganda is leveraging its efficiency and establishing systems for importing petroleum and gas.
Vitol, a global energy trader with revenues of 505 billion US dollars by 2022, has committed to building UNOC’s capacity in this sector.
The partnership will also support the development of infrastructure necessary for transporting petroleum products from Uganda’s refinery.
The shift to Tanzania underscores the growing importance of regional trade and the potential for alternative supply routes within East Africa.
