President Museveni Raises Questions Over Uganda’s Fuel Supply Arrangements Through Kenya

Ugandan President Yoweri Museveni has reignited debate over the way Uganda has been importing petroleum products through Kenya, saying his government discovered that fuel had previously been sourced through intermediaries rather than directly from major suppliers.

President Museveni Raises Questions Over Uganda’s Fuel Supply

In remarks released as part of his reflections on his 82nd birthday, Museveni explained that Uganda had for years relied on arrangements involving Kenyan middlemen when purchasing petroleum products. He said the issue came to his attention after a Kenyan senator alerted him to the situation around 2019.

According to Museveni, the revelation prompted Uganda to reconsider how it was procuring fuel and to search for a more direct and cost-effective supply system. He said the process eventually led to an agreement with Vitol, a major international energy trading company, in 2023.

Museveni stated that the new arrangement resulted in significant reductions in the prices Uganda paid for petroleum products. He said the cost of diesel under the agreement fell from US$118 to US$83 per metric tonne, while petrol dropped from US$97.50 to US$61.50. Aviation fuel also declined from US$114.25 to US$79.25 per metric tonne.

The Ugandan President also praised Kenyan President William Ruto for supporting the new arrangement. Museveni said Kenya subsequently allowed Uganda to transport its petroleum products through the country's oil pipeline and permitted Uganda to acquire a 20.15 percent stake in the Kenya Pipeline Company.

Museveni's comments have, however, generated renewed discussion in Kenya about the country's government-to-government fuel import programme. Critics have called for greater transparency around the arrangement and have questioned the role of private companies and intermediaries in the system.

Kenya's Energy and Petroleum Cabinet Secretary Opiyo Wandayi has defended the government-to-government arrangement, explaining that it was introduced in 2023 when Kenya was facing serious foreign-exchange shortages that threatened the country's ability to maintain reliable fuel supplies. The government says the arrangement allowed suppliers to provide petroleum products on extended credit terms, reducing immediate pressure on Kenya's dollar reserves.

The issue has therefore become a significant regional economic discussion involving Uganda and Kenya. Uganda depends heavily on the Kenyan transport corridor for access to imported petroleum products, while Kenya's infrastructure remains an important part of the supply chain serving several landlocked countries in East Africa.

For Uganda, the debate comes as the government continues investing in its own petroleum infrastructure. Earlier this week, Museveni launched construction of a 320-million-litre Kampala Storage Terminal in Mpigi, a project intended to strengthen the country's fuel reserves and reduce vulnerability to international supply disruptions.

The latest developments highlight the importance of transparent and efficient fuel procurement systems as East African countries seek to reduce energy costs and strengthen their energy security. The debate is expected to continue as officials and other stakeholders examine the arrangements through which petroleum products move across the region.

Elite Daily News Live will keep updating you with more developments on Uganda's fuel supply, energy security and regional trade.