Kenya Signs Lucrative Oil Deals With Three EAC Countries Ditching Tanzania
Kenya has acted to thwart Tanzania’s aspirations for an oil trade by pursuing agreements with South Sudan, Rwanda, and the Democratic Republic of the Congo (DRC).
According to reports, Kenya is almost certain to close a deal with Rwanda via Kenya Pipeline Company (KPC).
Under the terms of the agreement, which is anticipated to be signed in 90 days, Paul Kagame’s administration will import oil through the Port of Mombasa rather than Tanzania’s Dar es Salaam Port.
Tanzania is dealt a serious blow by this since there have been plans to use its ports to ship oil to Rwanda since 2021.
A KPC delegation is already in the Democratic Republic of the Congo (DRC) in an attempt to negotiate a deal akin to the one in Kigali.
Kenya has already increased its investment in cutting-edge infrastructure to guarantee that South Sudan’s oil needs are met by the Port of Mombasa.
“We are now fine-tuning the last steps of the process and, therefore, with Rwanda coming on board, we have a larger market to serve and even generate more revenues,” Joe Sang, the CEO of the Kenya Pipeline Company was quoted by The Africa Report as saying.
Given that Rwanda now only imports 3% of its oil through Kenya, this agreement is anticipated to be a foreign exchange bonanza for Kenya.
The agreements that Rwanda, the Democratic Republic of the Congo, and South Sudan have made with Kenya are timely because Uganda has tentatively agreed to keep importing Ksh264 billion worth of fuel through Kenya each year.
In the past, Uganda had threatened to use the Tanzanian route instead of Kenya, citing the exploitation of Oil Marketing Companies (OMCs) based in Kenya.
The Kenya-Rwanda agreement is expected to benefit Uganda as well because fuel will pass through its borders and be subject to customary levies.
Fuel headed for Rwanda will be pumped by KPC to Eldoret, where trucks will pick it up and drive it through Uganda to Kigali.
Sang is hopeful that Kenya will export more oil to Burundi, South Sudan, and Rwanda in addition to Rwanda.
Similar to Rwanda, South Sudan will pick up its refined fuel at the Eldoret KPC depot and then receive it through Uganda.
Kenya Signs Lucrative Oil Deals With Three EAC Countries Ditching Tanzania
