Kenya is actively lobbying Uganda to continue utilizing the port of Mombasa for its petroleum imports aligning potential bandits and consequences of ditching Mombasa for Tanzania. The move comes as Uganda prepares to initiate direct purchases of petroleum products this month, potentially opting for the port of Dar es Salaam over Mombasa.
High-level talks between the two countries occurred in November, addressing concerns that Uganda might shift its preference to Dar es Salaam for handling fuel imports. Uganda’s Ministry of Energy and Mineral Development confirmed the discussions, revealing that Uganda National Oil Company (Unoc) is set to directly purchase fuel from Vitol Bahrain.
The dispute between Kenya and Uganda surfaced when Kenya rejected Uganda’s request for Unoc to register as a local oil marketing company. This registration was crucial for utilizing Kenya Pipeline Company (KPC)’s network to handle and transport fuel destined for Uganda. The impasse prompted Uganda to explore alternatives, including talks with Tanzania over the potential use of the port of Dar es Salaam.
Kenya’s resistance to Unoc’s local registration not only strained diplomatic ties but also raised the possibility of financial repercussions for both nations. Uganda’s consideration of Dar es Salaam as an alternative port could impact KPC’s revenues and diminish tax collections for Kenya.
As the region observes the unfolding developments, the outcome of these negotiations will not only shape the dynamics of fuel trade between Kenya and Uganda but may also influence broader economic and diplomatic relations within East Africa. It’s clear that opting for Dar es Salaam for fuel imports will obviously affect Uganda because of clearance delays at the Port of Tanzania as compared to Mombasa.
Here is a link: https://www.businessdailyafrica.com/bd/markets/commodities/kenya-lobbies-uganda-to-stick-mombasa-for-petroluem-imports–4479474