Uganda Makes First Petroleum Imports Through Dar Es Salaam As Kenya Suffers Major Blow
Uganda has started importing petroleum products through Dar es Salaam Port, which represents a significant shift in its fuel supply strategy.
This change is in response to Kenya’s new restrictions on the amount 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 address supply issues caused by Kenya’s fuel import restrictions.
Kenya’s Ministry of Energy and Petroleum recently limited the amount of fuel Uganda could import via the Kenya Pipeline Company (KPC) system.
Here 👇 is how the petroleum (fuel) products will be transported to Uganda after exiting the @kenyapipeline infrastructure. #UNOCFuelImports 🚢⛽️ pic.twitter.com/UInsKWOYre
— UNOC (@UNOC_UG) August 14, 2024
In a letter to Uganda’s Ministry of Energy and Mineral Development, the Kenyan ministry mentioned system constraints.
The Ministry has thus established 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 and Petroleum Association of Uganda (SEPA) is concerned about the impact of the restrictions on Uganda’s fuel supply.
In a letter to the Chief Executive Officer of the Uganda National Oil Company (UNOC), SEPA General Manager Anthony Ogalo stated that current import volumes are insufficient to meet the country’s demand.
Uganda’s fuel demand is around 80,000 metric tonnes per 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 cautioned about potential product shortages and urged UNOC to increase import volumes to avoid stockouts.
In response to these challenges, Uganda intends to gradually increase the amount of fuel imported through Dar es Salaam.
Uganda has begun importing petroleum through Dar es Salaam Port, marking a significant shift due to new restrictions from Kenya on fuel imports.
— Mwango Capital (@MwangoCapital) August 16, 2024
The first shipment of 18M liters just arrived, with plans to gradually increase imports via Tanzania.
More: https://t.co/n6u05AXOx9 https://t.co/g5bj7veXPe pic.twitter.com/FTzanO99ar
They also intend to divert approximately 36 million litres (1,028 truckloads) per month from the KPC system.
This strategy is part of Uganda’s overall effort to reduce its reliance on Kenyan oil marketing companies (OMCs) for fuel supply.
UNOC has signed a five-year agreement with Vitol Bahrain to import fuel directly, signaling a significant shift from Uganda’s long-standing reliance on Kenyan suppliers.
The dispute with Kenya arose after Nairobi signed a government-backed agreement to import fuel on credit from three Gulf oil majors.
Uganda imports an average of 2.5 billion litres of petroleum per year, worth 2 billion USD, with KPC handling the majority of the cargo.
By selecting Dar es Salaam Port for petroleum importation, Uganda leverages its efficiency and establishes systems for importing petroleum and gas.
Vitol, a global energy trader with revenues of $505 billion by 2022, has pledged to increase UNOC’s capacity in this sector.
The partnership will also help to develop the infrastructure needed to transport petroleum products from Uganda’s refinery.
The shift to Tanzania highlights the growing importance of regional trade and the possibility of alternative supply routes within East Africa.
Uganda Makes First Petroleum Imports Through Dar Es Salaam As Kenya Suffers Major Blow
