- Kenya Pipelines turned down the request of Uganda to use its oil pipeline after their ban on oil purchase
- Uganda had earlier on applied to Kenya during the month of September to use Kenyan’s pipelines to transport it’s fuel
- Uganda will from 1st January 2024 stop buying fuel from Kenyan firms and instructions purchase oil from Vitol Bahrain E.C
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Kenya Turns Down Uganda’s Request to use Oil Pipeline on concern of displacement of local Companies
Kenya turned down the application by Uganda to use oil pipeline on September after their ban to purchase oil.
This follows after Uganda President Yoweri Museveni defended a decision to stop the purchase of petroleum products from Kenya, saying middlemen inflated prices by up to 59 percent, inflicting avoidable pain on consumers.
Kenya supplies about 90% of Uganda’s fuel while 10% is sourced via Tanzania.
Uganda has now opted to buy their fuel products from Vital Bahrain E.C after they affirmed a 5 year contract that is supposed to begin from 1st January 2024.
The state – owned Uganda National Oil Company (UNOC) had applied to the Kenyans Energy and Petroleum Regularly Authority ((Epra) on September in order to be registered as an Oil Marketing Company in Kenya.
This application was later turned down by Epra after Uganda agency failed to substantiate the requisite annual sales volume of 6.6 million of their super petrol, gasoil(diesel), and/ or jet A1/ kerosene in Kenya.
In addition, UNOC failed to provide evidence of operating five licensed retail stations in Kenya, operating a licenced depot in Kenya or achieving an annual turnover of $10 million for the last 3 years which is always an applicant requirement for operations outside Kenya.
More importantly, an action to approve the UNOC application would have seen Kenyan companies displaced from their location in order to accommodate UNOC.
However, industry players say, Uganda’s move of eliminating the companies in Kenya that control the oil imports supply chain and obtaining slots to refine the crude at the Mombasa refinery, is a complex process for landlocked Uganda to navigate.
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