Uganda begins using Dar es Salaam port for oil transportation

Dar es Salaam. The Uganda National Oil Company (UNOC) has begun shipping oil products through the Port of Dar es Salaam.

Previously, UNOC utilised the Port of Mombasa in Kenya and relied on the Kenya Pipeline Company (KPC) for transportation.

According to a statement signed by UNOC's chief executive officer, Ms. Proscovia Nabbanja, "Uganda plans to transport approximately 36 million litres of oil each month—equivalent to 1,028 truckloads—through the Port of Dar es Salaam." UNOC anticipates that this volume will increase over time.

The first shipment of 18 million litres (520 truckloads) has begun loading in Dar es Salaam and is expected to arrive in Kampala in the coming days.

Read: Uganda chooses Dar port for oil imports after fallout with Kenya

The agreement between the Dar es Salaam Port and UNOC was established from May 24 to May 25, 2024, during the Second Business Forum held in Dar es Salaam.

During the forum, the two countries agreed to enhance oil and other product transportation routes through Dar es Salaam instead of Mombasa.

This decision was prompted by technical and cost issues associated with using the Mombasa port, leading Uganda to seek Dar es Salaam as an alternative.

Tanzania's Deputy Prime Minister and Minister of Energy, Dr. Doto Biteko, emphasised that the agreements aimed to strengthen economic relations, particularly in the energy and industrial sectors.

"This meeting aimed to enhance infrastructure and foster cooperation in trade and industry," Dr. Biteko said.

Earlier this year, Uganda began negotiations with Tanzania to use the Dar es Salaam Port for its oil imports, intending to end reliance on Kenya's Mombasa port.

Uganda's dissatisfaction with the current system, where Ugandan fuel companies acquire 90 percent of their supplies through affiliated firms in Kenya, led to this decision.

President Yoweri Museveni expressed concerns about supply disruptions and high fuel prices.

In response, Uganda announced in November 2023 that it would transfer exclusive rights for petroleum supply to a unit of global energy trader Vitol.

Uganda imported approximately $1.6 billion worth of petroleum products in 2022, most of which came from the Gulf region.

Although Uganda initially planned to continue imports through Kenya, Energy Minister Ruth Nankabirwa reported that the Kenyan government refused to grant the necessary license.

"We are negotiating with the Tanzanian government, and I will meet with Her Excellency, the President, on this matter," Nankabirwa stated earlier this year.

"We want to find a route that ensures the security of our petroleum supplies."