Why Uganda Opted for Expensive Tanzania Oil Route Amid Ongoing Case Against Kenya


Ugandan Minister for Energy Ruth Nankabirwa has explained why her government opted to import oil through Tanzania ahead of a ruling on its diplomatic tiff with Kenya.

While addressing the nation on the progress of the country’s oil and gas sector, the minister acknowledged that the Tanzania route would be more expensive than the Kenyan one.

However, she maintained that their decision was informed by the need to prevent a potential fuel shortage crisis.

Uganda’s plan to start importing oil on its own in January this year was hampered by the Energy and Petroleum Regulatory Authority (EPRA) which declined to award it a certificate for business.

Ugandan Minister for Energy Ruth Nankabirwa addressing parliament in November 2023.

Photo

Ruth Nankabirwa

Uganda hence sued Kenya at the East African Court of Justice (EACJ), seeking to be granted a licence to operate as an Oil Marketing Company (OMC). 

On the other hand, she noted that Tanzania was likely to waive taxes for Uganda, making the route more viable in the long run.

“We are prepared for any emergency crisis, ensuring uninterrupted supply. I have already started engagement with the President of Tanzania to make sure that the country is secure in terms of supply.

“You cannot sit there and be at the mercy of one person. We know that the alternative route might be expensive because of the logistics involved but we also know that there is a possibility of negotiation with the government of Tanzania to waive some taxes so that their sister country can be able to do business,” she stated.

On the other hand, the Minister expressed that they would continue to pursue the interests of its citizens even as they await the court ruling next month.

“The final ruling of the court case is expected to be made on January 22 but was deferred to February 12. We are in court, not because we wanted to but because the government-only oil company was denied a certificate by EPRA,” she added.

Uganda, through the Petroleum Supply Amendment Bill 2023 authorised the Uganda National Oil Company (UNOC) to import oil without using Kenyan middlemen. 

The bill which passed in December 2023, thus made UNOC the only company authorised to import oil directly from the refineries.

Uganda had accused Kenyan companies (middlemen) of prioritising profits at the expense of cheaper pump prices for Ugandans

Motorists at a petrol station in Kinoo along Waiyaki Way on January 7, 2023.

Kenyans.co.ke





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