Kenya and Uganda End Oil Imports Dispute

East African neighbors Kenya and Uganda have reached an agreement to end a bitter dispute about oil imports via the Kenyan port of Mombasa to landlocked Uganda.

For years, Uganda has imported fuels from Kenya via Kenyan companies and middlemen. Kenya has been importing fuels and selling them to its neighbors in East Africa.

Last autumn, Uganda’s President Yoweri Museveni accused Kenyan resellers and middlemen of inflating fuel prices by up to 58% and said Uganda has been “cheated” by the fuel resellers to a “huge loss” for the country, the BBC reported at the time. 

For years, Uganda has been importing 90% of the fuel it consumes from oil marketing companies in Kenya, which sell it to their Ugandan subsidiaries. 

Now Kenya has agreed to allow Uganda’s state oil firm Uganda National Oil Company (UNOC) to receive a license to import petroleum products via Mombasa, Kenyan media report.

Licensing UNOC to import refined petroleum products ends a row that has lasted for months and saw international courts involved in lawsuits.

Early this year, Uganda sued Kenya at the East African Court of Justice after Kenya denied in November a license to Uganda’s UNOC to operate in Kenya and handle oil product imports headed to Uganda.

The oil import row escalated to strained diplomatic relations between the two neighboring countries.

Now the dispute is coming to an end, according to local media.

“You will see Unoc getting a licence and then we will see how to work together because usage of our pipeline is an opportunity for us,” Davis Chirchir, Kenya’s Cabinet Secretary in charge of Energy and Petroleum, was quoted as saying.

UNOC will use Kenya Pipeline Company’s infrastructure so there will be no loss of opportunity for Kenya, he added, noting that “We are working closely with Uganda to resolve the challenge.”

By Tsvetana Paraskova for Oilprice.com

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