The government of Kenya, through its energy sector regulators, the Energy and Petroleum Regulatory Authority of Kenya (EPRA) has finally granted the the Uganda National Oil Company (UNOC) a petroleum products importation license.
The license was handed over to UNOC’s Chief Executive Officer, Ms. Proscovia Nabbanja, by Daniel Kiptoo Bargoria, the Director General of the Energy and Petroleum Regulatory Authority (EPRA) in Nairobi Kenya, yesterday, March 28th 2024.
The license is a major prerequisite for UNOC to import fuel through Kenya.
Under Uganda’s new Petroleum Supply (Amendment) Act, 2023, UNOC, a government-owned company was given powers as the main importer and supplier of petroleum products destined for the Ugandan market.
In November 2023 Kenya declined to issue Uganda National Oil Corporation (UNOC) a licence to operate as a local oil marketer, therefore meaning UNOC can’t import fuel through Kenyan territory. Uganda accused Kenya of falling back on its commitment to allow Uganda directly import its own fuel. This sparked off yet another trade biff between the two Eastern African neighbours and close friends in everything except trade where hardly a year goes by before a trade tiff strains relationships between Kampala and Nairobi.
On December 28th 2023, Uganda then dragged Kenya to court saying that since fuel destined for Uganda was wholly in transit, it wasn’t necessary to have a local marketer’s license and therefore the requirements that Kenya wanted of UNOC were an unnecessary non-tariff barrier.
Some of the requirements included proof of annual sales of 6.6 million litres of super petrol, diesel and kerosene; ownership of a licensed petroleum depot and at least five retail stations locally. Uganda argued that while it had complied with all other requirements such as registering a branch in Kenya, these specific requirements were only designed to frustrate her energy security efforts.
Kenya changes its mind
But following a February 2024 meeting between Kenya’s President Williams Ruto and Uganda’s President Yoweri Kaguta Museveni, it appears Kenya, has had a change of heart, paving the way for the trade impasse to be resolved. At least for now.
“The Uganda National Oil Company (UNOC) is pleased to announce a significant development in its operations, as it prepares to begin importing fuel through Kenya. This follows the resolution of a legal matter pertaining to the licensing process in Kenya,” proclaimed a March 28th statement by UNOC.
“The decision comes after the parties involved in the constitutional petition filed in the High Court of Kenya, sitting in Machakos, opted to withdraw their petition. UNOC, recognising the lack of constitutional basis in the petition, consented to its withdrawal, effectively bringing the matter to a close,” UNOC further said, adding: “Following the resolution of the matter, the Energy and Petroleum Regulatory Authority of Kenya issued UNOC a license to facilitate the importation of petroleum products. We are pleased to have resolved this legal matter and to move forward with our plans to import fuel through Kenya. This development contributes immensely to our journey to enhancing Uganda’s energy security”.
UNOC reiterated that it remains committed to “fostering cooperation and enhancing energy security while adhering to the highest standards of operational excellence”.
The granting of a petroleum products importation license by Kenya to Uganda restores some relative calm between Kampala and Nairobi⏤ at least for now.
But anyone familiar with the erratic trade relations between these two East African neighbours and friends in everything except trade, will tell you that it won’t be long before the overly entitled and frequently patronising Kenya throws yet another trade tantrum on another front, setting off another senseless, costly and time-wasting trade tiff episode.