President William Ruto is gearing up for a meeting with Uganda’s President Yoweri Museveni to address their ongoing disagreement in the oil trade, according to Cabinet Secretary Peninah Malonza.
The dispute arose when Kenya prohibited Uganda from utilizing the Kenya Pipeline Company (KPC) infrastructure for transporting refined petroleum products from Mombasa port to Uganda, as directed by Uganda’s Cabinet.
Malonza conveyed, “The two presidents have a scheduled meeting to discuss the impasse, and Kenya will present its position at the next East Africa Community (EAC) Heads of State Summit,” as reported by Daily Nation.
She reassured the public that the trade disagreement shouldn’t jeopardize diplomatic ties between the two nations, emphasizing that such disputes are normal and can be resolved through existing treaties and diplomatic protocols.
“Uganda is not just Kenya’s trading partner but also the largest market for Kenyan oil.
Nairobi and Kampala have coexisted peacefully, appreciating each other’s economic potential since independence,” Malonza added.
In November of the previous year, Uganda terminated its oil deals with Kenya, citing exorbitant prices from middlemen in Kenya as a factor exacerbating the country’s fuel crisis.
President Museveni expressed surprise at the situation, stating, “A whole country buying from middlemen in Kenya or anywhere else!! Amazing but true.”
Uganda imports over 90% of its petroleum products through the Port of Mombasa in Kenya and the rest through the Dar es Salaam port in Tanzania.
Licensed Ugandan Oil Marketing Companies (OMCs) handle independent importation through Kenya and Tanzania.
On January 2, 2024, Uganda filed a lawsuit against Kenya for denying its entity, the Uganda National Oil Company (UNOC), the right to operate as an Oil Marketing Company (OMC) in Kenya.
UNOC sought to use the Kenya Pipeline but was instructed by the Energy and Petroleum Regulatory Authority (EPRA) to register as an oil marketer in Kenya.
EPRA demanded several documents from UNOC, including business registration certificates, identification documents for directors, work permits, tax compliance certificates, proof of financial capability, and evidence of operating licensed retail stations and a depot in Kenya.
UNOC, a fully state-owned Ugandan company, found these requirements burdensome, arguing that it intended solely to transport products through Kenya without conducting business in the country.
Uganda has escalated the matter to the East Africa Court of Justice (EACJ), placing responsibility on the Kenyan government for the delay in granting exemptions to operate without fulfilling EPRA’s requirements.
