Uganda in talks to import all its oil via Tanzania after dispute with Kenya

Dar es Salaam. The government of Uganda is negotiating with its Tanzanian counterpart on importing all of its oil products through Dar es Salaam port.

The move would mean an end to imports via Kenya's Mombasa port, Uganda's Energy Minister told Reuters on Thursday.

Also read: Fallout between Uganda and Kenya a boon for Dar port

Uganda has been dissatisfied with the longstanding system under which Ugandan fuel companies buy 90 percent of their supplies through affiliated firms in Kenya.

President Yoweri Museveni has complained that this exposes his country to supply disruptions and high pump prices.

Also read: Revealed: Kenya's State House hand in the Uganda fuel fallout

In response, Uganda announced in November that it would hand over exclusive rights for the supply of all petroleum products to a unit of global energy trader Vitol. Uganda imported $1.6 billion worth of petroleum products in 2022, mostly originating from the Gulf.

The government planned for imports to still arrive via Kenya, but Energy Minister Ruth Nankabirwa said the Kenyan government refused to grant the required licence.

"We are negotiating with the Tanzanian government. The technical teams are talking, and I will be meeting Her Excellency, the president, on that," Nankabirwa said.

"We want to find a route that will keep us safe in terms of petroleum supplies."

Also read: Kenya declines Uganda's request to use oil pipeline

Kenya's Energy and Petroleum Regulatory Authority (Epra) and Tanzanian officials did not immediately respond to a request for comment.

However, recently, the Tanzania Permanent Secretary in the Ministry of Energy, Mr Felchesmi Mramba, confirmed the two sides had engaged in negotiations.

“It is true that Uganda has expressed interest in using the Dar es Salaam Port for the importation of some petroleum products. The negotiation came after the arrival of a delegation from a neighbouring country,” he said over the phone.

“At the ministerial level, we are ready. Currently, we are waiting for Uganda’s readiness to commence the importation,” added the PS.

He said Tanzania uses the Bulk Procurement System (BPS) for the importation of a large volume of petroleum products, noting that Burundi, Zambia, and Malawi are among the neighbouring countries that have joined the BPS.

Furthermore, he said, having expressed interest, Uganda would join the BPS following Tanzania's readiness to accommodate the neighbouring country.