Ugandan Parliament has adopted the Petroleum Supplies Amendment Bill 2023 effectively paving way for the Uganda National Oil Company to import all petroleum products and cut oil deal ties and dependence on the Kenyan government.
The Petroleum Supply (Amendment), Bill 2023 is aimed at eliminating the middlemen in the oil supply chain that are said to be the cause of fluctuations in oil pump prices.
The Uganda legislators said there are middlemen who have been infusing profit margins which has been making their country incur losses.
They added that the Bill is timely in eliminating dependence on Kenyan brokers who according to the committee findings, have adversely disadvantaged Ugandans in access to petroleum products timely and in the required quantities.
“Uganda imports 90 per cent of its petroleum products through Kenya and 10 percent through Tanzania. The system currently imposes three layers of middlemen from overseas refineries to Ugandan oil marketing companies. Each of the middlemen companies infuses a profit margin which is ultimately fed into the final pump price.” Emmanuel Otaala, chairperson of the Committee on Environment and Natural Resources said.
Under the existing importation structures, the Ugandan Oil Marketing Companies have been accessing their petroleum products import allocations through their affiliated Kenyan Oil Marketing Companies registered and participating in Kenyan and Tanzanian import structures.
Companies registered and participating in Kenyan and Tanzanian import structures.
In April 2023, the government of Kenya made changes to the petroleum products import system by replacing the Open Tender System with the government-to-government importation arrangement with the governments of the United Arab Emirates and the Kingdom of Saudi Arabia to manage some of the importation challenges that Kenya was facing.
As the bill awaits the president’s assent; at the start of November president Museveni issued a statement saying they have been losing a lot of money through middlemen in Kenya who sell to them petroleum products.
“Without my knowledge, our wonderful People were buying this huge quantity of petroleum products from middlemen in Kenya. A whole country buying from middlemen in Kenya or anywhere else!! Amazing but true. Why not buy from the Refineries abroad and transport through Kenya and Tanzania, cutting out the cost created by middlemen? Those involved were not bothered by these issues.” Museveni said in his statement on X.