Uganda Explains Importing Oil Through Tanzania Despite Deal With Kenya: "Struggling With Limits"

• Uganda is diversifying its oil import routes by supplementing fuel imports through Tanzania despite having a deal with Kenya to use Mombasa Port for primary oil imports
• Uganda National Oil Corporation (Unoc) official cited logistical limits on the Kenyan route as the reason for the additional imports through Tanzania's Dar es Salaam Port
• Uganda requires over 174,000 metric tonnes of oil per month, driven by a growing fuel demand of seven million litres daily, increasing by 7% annually

Elijah Ntongai, a journalist at TUKO.co.ke, has more than three years of financial, business, and technology research expertise, providing insights into Kenyan and global trends.

Uganda has shared details on its oil importation deals with Kenya and Tanzania.

Kenya recently faced a threat of losing billions of shillings in revenues after Uganda threatened to cut oil importation deal through Mombasa and move to Tanzania's Dar-es-Salaam Port.

Despite settling the disagreements with Kenya and resuming importation through Mombasa, Uganda recently imported fuel through Dar es Salaam.

Why Uganda is importing fuel through Tanzania

According to a report by The East African, Uganda is ramping up its efforts to meet the nation’s growing fuel demands by diversifying its import routes, despite having established an agreement with Kenya for petroleum imports earlier this year.

Ugandan officials attribute the decision to import oil through Tanzania to logistical limits on the Kenyan route.

The Uganda National Oil Corporation (Unoc) Chief Corporate Affairs Officer, Tony Otoa, stated that while the country remains committed to importing oil through Kenya, capacity challenges along the Mombasa route have necessitated an alternative.

“We are struggling with the limits set in Kenya. And UNOC going to Dar es Salaam has nothing about cost, we just need to make sure that our demand is met at all times to make sure we have the needed monthly stocks,” Otoa said as reported by The East African.

How much oil does Uganda need?

Uganda recently completed negotiations to use Kenya's port of Mombasa as its primary import hub under a Petroleum Products Supply Agreement with Vitol Bahrain.

According to Unoc, Uganda requires more than 174,000 metric tonnes (MT) of oil per month, consisting of 80,000 MT of petrol, 80,000 MT of diesel, and 14,000 MT of Jet-A1 fuel and kerosene.

In July, Uganda received its first shipment of petroleum products via Mombasa on two vessels, the MT Martinez and the Sinbad, carrying a combined total of over 138,000 MT of petrol and diesel.

Uganda's fuel consumption, which is growing at a rate of 7% annually and stands at approximately seven million litres daily, has prompted Unoc to secure additional supplies through the port of Dar es Salaam as the shipments that came through Mombasa were not sufficient.

This shift in import strategy follows Uganda’s policy change in late 2023, which designated Unoc as the sole importer and distributor of petroleum products.

Unoc has projected that it will import 36 million litres of oil monthly through Tanzania, and this volume is expected to increase over time.

However, officials stressed that Kenya remains the primary port of entry for Uganda’s fuel imports, with Tanzania serving as a contingency option.

Uganda to start oil production

In other related news on TUKO.co.ke, Uganda announced the completion of the drilling of 74 oil wells, paving the way for commercial oil production in 2025.

The country revealed it has 6.6 billion barrels of petroleum resources, 1.5 billion of which are recoverable; if commercialised, these resources will fuel its economic ambitions.

Despite 4 billion barrels discovered in Lokichar, Kenya faces challenges in sustaining refinery operations; in 2019, Nairobi exported over 200,000 barrels of crude oil to China.

Proofreading by Otukho Jackson, a multimedia journalist and copy editor at TUKO.co.ke

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