Yesterday, July 3 saw a big milestone for Uganda’s petroleum industry, as the first consignment of petroleum products directly imported by the Uganda National Oil Company (UNOC) arrived at the port of Mombasa, Kenya.

This inaugural shipment, comprising two tankers carrying 70,000 tonnes of refined petroleum, marks the end of the long-standing monopoly by Kenyan oil marketers and a new era of energy independence for Uganda.

The Minister for Energy and Mineral Development, Hon Ruth Nankabirwa, was present in Mombasa on Wednesday to witness this historic event.

Celebrating this achievement, she shared her enthusiasm on social media, highlighting the strategic shift in Uganda’s approach to petroleum importation.

“Today in Mombasa, Kenya, I was honoured to commemorate the commencement of direct importation of refined petroleum products by UNOC,” she stated.

This transition from a government-to-government (G2G) arrangement to direct importation by UNOC is expected to introduce operational challenges initially, as is common with any significant change.

However, Minister Nankabirwa expressed confidence in overcoming these challenges through cooperation with the Kenyan government and other relevant authorities.

She said her ministry is focused on ensuring the quality and continuity of petroleum supply to Uganda, adhering to scheduled deliveries without disrupting the performance of the Kenya pipeline system.

The consignment’s arrival is part of a broader agreement with Vitol Bahrain, aimed at reducing pump prices below those currently offered in Kenya. This deal not only signifies a reduction in fuel costs but also strengthens the economic ties between Uganda and Kenya.

The Kipevu Oil Terminal 2 (KOT2) in Mombasa, where the tankers docked, is a state-of-the-art facility capable of handling large volumes of hydrocarbon products. Managed by the Kenya Ports Authority (KPA), KOT2 has recently undergone extensive upgrades to increase its capacity and efficiency.

According to KPA Managing Director, Capt. William Ruto, the terminal can handle up to four vessels simultaneously and is equipped with modern infrastructure to support diverse petroleum products.

Despite concerns about the impact on local Kenyan oil firms, KPA assures that there will be no revenue losses for the Kenya Pipeline Company (KPC).

The agreement permits UNOC to use KPC’s storage and transport facilities, ensuring a seamless supply chain from Mombasa to Uganda. This arrangement not only benefits Uganda but also aligns with Kenya’s strategy to optimise its port facilities and boost regional trade.

The partnership between UNOC and Vitol Bahrain involves keeping both Kenyan and Tanzanian routes active, although priority will be given to supplies through Kenya due to its proximity and significant investments in port infrastructure. This strategic choice reinforces the importance of Mombasa as a central hub in East Africa’s energy sector.

Furthermore, UNOC’s mandate includes ensuring the security of petroleum supply within Uganda. It involves working closely with Ugandan Oil Marketing Companies (OMCs), which are required to comply with rigorous financial and operational standards to participate in this new importation framework.