Kenya resolves its oil importation row with Uganda - report

Source: Market Screener

NAIROBI (Reuters) - Kenya will allow Uganda's state oil firm to import petroleum products through its port of Mombasa, its energy minister was quoted as saying in a local newspaper on Thursday, to end a row that had caused diplomatic problems between the two neighbours.

Uganda has been seeking alternative ways of importing its petroleum products, including through a Tanzanian port, ending decades of a system under which its oil retailers were getting their cargo through affiliated firms in Kenya.

"You will see UNOC (Uganda National Oil Company) getting a licence and then we will see how to work together," Kenya's Energy Minister Davis Chirchir was quoted as saying in the Business Daily newspaper.

UNOC will use the Kenya Pipeline Company to move the products, meaning that Kenya will still benefit from the arrangement, the paper quoted the minister as saying.

Landlocked Uganda imported $1.6 billion worth of petroleum products in 2022, mostly originating from the Gulf. Some 90% of the products are imported through Kenya.

It announced in November that it planed to hand over exclusive rights for supply of all petroleum products to a unit of global energy trader Vitol.

Using Kenyan firms to import oil had "exposed Uganda to occasional supply vulnerabilities where the Ugandan retail companies were considered secondary whenever there were supply disruptions," affecting retail prices, the government said at the time.

Kenya's President William Ruto and his Ugandan counterpart Yoweri Museveni met in Uganda last month and agreed to resolve the feud over oil imports, Kenyan media outlets reported.

(Reporting by Duncan Miriri; Editing by Michael Perry)