Latest data shows that Uganda has imported petroleum products worth $200 million through the port of Dar es Salaam, in Tanzania since October 2023.
This is a huge blow to Kenyan oil companies that were getting revenue by importing oil on behalf of Ugandan oil marketers through the port of Mombasa.
In addition, entrepreneurs with major oil infrastructure in Kenya are set to lose even more as the rivalry between the Mombasa and Dar es Salaam ports escalates.
This is after Uganda in January 2024 announced it will be getting oil imports through Dar es Salaam after failing to register Uganda National Oil Company in Kenya to facilitate importation via Mombasa port.
On January 30, 2024 Uganda’s Energy Minister Ruth Nankabirwa stated that Kenya was frustrating Uganda’s oil companies, affecting fuel supply in the country.
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“You can’t sit there and be at the mercy of one person. So far I have met with the president of Tanzania. My president sent me as an envoy, and we are in discussions,” said Nankabirwa.
“So we know that the alternative route could be expensive because of the logistics that are involved but we also know that there is a possibility of a negotiation with the government of Tanzania, to waive some taxes so that their sister country can be able to do business,” she added.
According to The Daily Monitor, Nankabirwa revealed that Kenya’s President William Ruto was very cooperative and willing to work with the government of Uganda.
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“The president sent me to meet President Ruto four times, and he was so supportive on all the times, then he sent me my brother Davis Chirchir, the Minister of Energy and some Kenyan people jumped in court. What do you do if you are sued? You wait for the ruling. So we have been talking and we are continuing to talk but now we have a time frame because we feel the pump price in Uganda should be lower,” she stated.
Uganda’s decision comes at a time when Kenya had invested millions of money in the oil infrastructure to facilitate transit of oil to Uganda, Rwanda and other landlocked countries in the region.
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For instance, Kenya invested $385 million in Kipevu oil terminal 2 (KOT2) at the Mombasa port and $170 million at the Kisumu port.
Consequently, the newly launched oil infrastructure in Kenya risk being underutilized if Uganda stops importing petroleum products through Mombasa.
