The Uganda National Oil Corporation (Unoc) states that no Kenyan oil marketing company will participate in the Unoc-Vitol Bahrain agreement. The deal aims to reduce pump prices below what Kenyan dealers are already offering.
Uganda will now transport petroleum products from Mombasa to Kampala via the Kenya Pipeline Corporation‘s infrastructure and Kipevu Oil Terminal 2. The nation will receive its first two vessels in the first week of July 2024. The first batch will be 58,000 metric tonnes (MT) of petroleum product, while it will get 68,000 MT of diesel on 2nd July.
The East African was able to examine the Sale and Purchase Agreement (SPA), and claims that Kenya was selected by Uganda over Tanzania because of its port investment and close proximity.
Uganda has been seeking alternative ways of importing petroleum products, including through a Tanzanian port, because its oil retailers have for decades received their cargo through affiliated firms in Kenya. According to Unoc chief corporate affairs officer Tony Otoa the first two vessels, MT Navig8 Martinez (2nd July), and MT Sinbad (3rd) are a start of a great thing for Uganda.
“Unoc will work to ensure stability in fuel supply to the country. We have concluded all legal and other arrangements to receive the two vessels,” said Mr Otoa.
Nonetheless, Unoc’s entry into Kenya as a direct importer will hurt local oil firms. However, KPC will not suffer any revenue losses, as it still acts as the storage facility and transport network for shipping the fuel to the neighbouring country.
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