A bill enabling Uganda National Oil Business (Unoc), a state-owned oil business, to buy and supply oil to Uganda’s domestic market has been passed by the country’s cabinet.
The bill will terminate the present method of importing oil through Kenyan wholesalers if it is approved by parliament.
The goal of this new initiative, according to Energy Minister Ruth Nankabirwa who spoke on the issue on Tuesday, is to “improve the security of supply of petroleum products to the country.”
She disapproved of the current agreement with Kenya, stating that “it exposed Uganda to occasional supply vulnerabilities where Ugandan oil marketing companies were considered secondary whenever there were supply disruptions,” which hiked fuel prices in Uganda.
Currently, according to Ms. Nankabirwa, Tanzania’s Dar es Salaam port receives the remaining gasoline imports from Uganda, a landlocked nation, while Kenya’s Mombasa port handles over 90% of Uganda’s fuel imports.
The minister of energy also declared that Uganda and Vitol Bahrain EC, a Bahraini energy business, had achieved an agreement whereby the Bahraini company would fund the Uganda National Oil business’s efforts to procure and supply oil.
“UNOC and Vitol Bahrain E.C. have negotiated a five-year contract, and the Partner (Vitol) will be financing the business by providing a working capital,” the energy minister revealed.
She also stated that Uganda will build a storage facility in Mpigi, central Uganda, as well as strengthen its domestic and Tanzanian gasoline supplies.
Vitol and UNOC will set up “buffer stocks” in Uganda and Tanzania’s neighbor in order to ensure Uganda’s supply security, stated Nankabirwa.
According to a spokesman for the energy ministry, Vitol and UNOC had already signed the agreement, and the state company was anticipated to get its first exclusive shipments in January.
