Fallout between Uganda and Kenya a boon for Dar port
What you need to know:
- Uganda claimed last week that it was kept in the dark about the new importation structure by Kenya, which entered into a government-to-government deal with the UAE and the Kingdom of Saudi Arabia without consulting the neighbouring country.
Dar es Salaam. The future of business looks brighter for the Port of Dar es Salaam business after the facility became the choice of Uganda and a Bahrain company for importing oil products.
Uganda claimed last week that it was kept in the dark about the new importation structure by Kenya, which entered into a government-to-government deal with the UAE and the Kingdom of Saudi Arabia without consulting the neighbouring country.
According to the Minister for Minerals and Energy in Uganda, Dr Nankabirwa Sentamu, representatives of the ministry and the Uganda National Oil Company (UNOC) observed during a meeting with Kenyan oil marketers that the decision by Kenya to enter into the Gulf deal had left Uganda’s supplies vulnerable and exposed its citizens to expensive pump prices.
As a result, the government of Uganda and the Vitol Bahrain E.C Company, a Bahrain-based company, have chosen Dar es Salaam port as the gateway for importing oil products. The decision, which starts immediately, experts said yesterday, underlined the growing importance of the Dar es Salaam Port as a pivotal hub for regional commerce and further solidified efforts to promote economic relations between the two countries.
They said the move underscores the country’s growing reputation as a dependable partner in the region, ensuring a stable supply of oil for Uganda and the broader East African region.
“This choice provides a chance for the outlet to increase its attractiveness to multinational corporations like Vitol. This development not only enhances the port’s status but also bolsters our economic prospects,” said Dr Emma Mwambe, an economist from the University of Dodoma (Udom).
Dar es Salaam Port has witnessed significant improvement and expansion efforts in recent years, making it an attractive destination for international trade.
“This would make the port a preferred gateway for imports and exports in the East African region,” said a logistics expert, Mr Ahmed Hassan. He added that the choice not only strengthens the port’s role but also positions Tanzania as a regional trade hub.
Vitol E.C Company is a formidable player in the global energy trade, with revenues reaching $505 billion by 2022. Securing permission to distribute oil in Uganda received a nod from the UNOC.
Uganda currently imports 90 percent of her fuel through Kenya, but it argues that the latter dropped a transparent and price-competitive open tendering system for the Gulf deal without consultation.
“UNOC and Vitol Bahrain E.C have agreed to a five-year contract, and this partnership is set to provide the necessary financial backing for the oil business. It will leverage Vitol’s global reserves to ensure a stable working capacity and foster healthy competition in oil product pricing,” said Dr Sentamu.
