Ugandan President Yoweri Museveni has revealed that a Kenyan Senator first alerted him to Uganda’s reliance on petroleum middlemen in Kenya, prompting him to question the arrangement.
Speaking on Thursday, September 17, during the groundbreaking of a 320-million-litre storage terminal in Mpigi, Museveni said he was unaware that Uganda was sourcing fuel through intermediaries until the senator, whose identity he did not disclose, brought the matter to his attention.
“Uganda was buying petroleum products through middlemen in Kenya. The person who woke me up first was a senator from Kenya. He told me, ‘Do you know that your country is buying petroleum through middlemen?’ I didn’t know,” he said.
Museveni said he subsequently contacted then-Energy Minister Irene Muloni to question why Uganda was not purchasing petroleum products directly from refiners or bulk suppliers.
Museveni said the concerns were not immediately resolved, but Uganda later established links with suppliers that allowed it to move away from the intermediary arrangement.
He argued that purchasing directly from refiners rather than traders offered a more efficient way for Uganda to source petroleum products.
According to figures presented during the event, the premium paid for diesel fell from about Ksh15,280 ($118) to 10,740 ($83) per metric tonne, while the premium on petrol dropped from Ksh12,620 ($97.50) to Ksh7,964 ($61.50) after Uganda ended the previous arrangement with Kenyan intermediaries.
Aviation fuel also recorded a reduction, with the premium dropping from Ksh14,790 ($114.25) to Ksh10,263 ($79.25) per metric tonne, according to the cited figures.
Museveni said the differences demonstrated the need to end the previous procurement model and give the Uganda National Oil Company (UNOC) a larger role in direct imports, with the company partnering with global energy trader Vitol to source petroleum products directly.
Uganda announced in November 2023 that it would end reliance on Kenyan oil marketing companies and intermediaries, with implementation initially targeted for January 2024.
The transition faced a dispute after the Energy and Petroleum Regulatory Authority (EPRA) initially declined to issue UNOC an import licence.
However, after the Ugandan government sued Kenya in December 2023, the matter was resolved in March 2024, paving the way for direct imports through the Port of Mombasa using Kenya Pipeline infrastructure.