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Uganda Strikes Fuel Deal with Vitol: Breaking Free from Kenya’s Grip

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  • Ruth Nankabirwa, the Energy and Mineral Resources Minister, conveyed to oil marketers that Uganda National Oil Company (Unoc) is set to receive its inaugural shipment of super petrol and diesel from June 18 to 26.
  • Ugandan authorities have struck a significant deal with Vitol, aiming to offer consumers fuel at lower prices compared to Kenya’s government-backed arrangement.

Ugandan authorities have struck a significant deal with Vitol, aiming to offer consumers fuel at lower prices compared to Kenya’s government-backed arrangement. Beginning next month, Uganda will commence direct fuel imports through a partnership with Vitol Bahrain, anticipating cost-effective petroleum products.

Ruth Nankabirwa, the Energy and Mineral Resources Minister, conveyed to oil marketers that Uganda National Oil Company (Unoc) is set to receive its inaugural shipment of super petrol and diesel from June 18 to 26. Negotiations with Vitol Bahrain aim to undercut prevailing pump prices, primarily influenced by Kenya’s deal with Gulf oil majors.

This move signifies Uganda’s shift from dependence on Kenya for fuel procurement, which historically relied on the Open Tender System (OTS) or Kenya’s government-backed agreements. Under the Vitol Bahrain deal, most of Unoc’s fuel will enter through Mombasa Port, with the remainder through Dar es Salaam.

Annually, Uganda imports approximately 2.5 billion liters of fuel, valued at $2 billion, with Kenya Pipeline Company (KPC) handling the bulk, around 90%. Nankabirwa’s circular concludes months of anticipation, during which Unoc awaited licensing to operate as a local oil marketer, honoring Kenya’s regulations.

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