Uganda moves to end oil import deal with Kenya

Uganda's cabinet has approved a bill allowing the state-owned oil company Uganda National Oil Company (Unoc) to source and supply oil to the domestic market.

If approved by parliament, the bill will end the current arrangement of importing oil through Kenyan distributors.

Energy minister Ruth Nankabirwa on Tuesday said that the change aims to "improve the security of supply of petroleum products to the country".

She criticised the existing arrangement with Kenya, saying that "it exposed Uganda to occasional supply vulnerabilities where Ugandan oil marketing companies were considered secondary whenever there were supply disruptions", subsequently raising oil prices in Uganda.

Currently, Uganda, a landlocked country, imports more than 90% of its fuel through Kenya's Mombasa port and the remainder through Tanzania's Dar es Salaam port, according to Ms Nankabirwa.

The energy minister also announced that Uganda has reached a deal with Bahrain energy company Vitol Bahrain EC, under which the Bahrain company will finance the Uganda National Oil Company's move to source and supply oil.

She also said that Uganda will shore up its fuel stocks in Tanzania and domestically, including by constructing a storage facility in Mpigi in central Uganda.