Kenya, Uganda Finally end oil import feud, After Kenya agreed To license Uganda National Oil Company

Kenya is poised to grant a long-awaited license to the Uganda National Oil Company (UNOC), marking the end of a protracted feud that strained relations between the two nations and even found its way to the regional court.

Announced by Energy Cabinet Secretary Davis Chirchir, the impending issuance of the permit signals progress towards enabling UNOC to directly import fuel through the Kenya Pipeline Company (KPC).

Chirchir emphasized the collaborative potential, stating, “Granting UNOC a license opens up opportunities for cooperation as they utilize our pipeline infrastructure without displacement. KPC will continue as the primary transporter. Our engagement with Uganda is aimed at resolving any outstanding challenges.”

This development follows the withdrawal of a legal challenge filed at the High Court in Machakos aimed at halting UNOC’s licensing. With the case withdrawn, sources indicate that the license issuance, expected next month, could bring resolution to the dispute, potentially allowing UNOC to procure fuel from Vitol Bahrain.

Uganda had resorted to legal recourse in December to secure the license granting access to KPC’s infrastructure. While the case remains pending, the license’s issuance could preclude further legal proceedings, safeguarding diplomatic relations.

UNOC’s plans to directly import fuel from Vitol Bahrain are poised to disrupt the revenue streams of local oil marketing companies, which have historically supplied Uganda. UNOC, traditionally catering to state-owned entities, is now poised to enter the private oil market sector.

Uganda’s decision to pursue direct imports through UNOC aligns with Kenya’s earlier agreement with Gulf majors to facilitate fuel imports on extended credit terms, aimed at alleviating dollar demand and supporting the local currency.