The government of Kenya has announced plans to grant licence to Uganda National Oil Company (Unoc), to import fuel directly through Kenya’s infrastructure.
Energy Cabinet Secretary Davis Chirchir made the announcement and said the move marks an end to months-long dispute between the two nations, potentially easing diplomatic tensions. A case filed in the High Court of Machakos to block UNOC’s licensing was withdrawn, indicating a step forward in resolving the issue.
Resolved dispute
UNOC initially faced challenges obtaining a license from Kenya’s energy sector regulator due to compliance issues, including proving ownership of licensed petroleum depots and retail stations in Kenya. Uganda then explored alternative solutions, including importing fuel through Tanzania, after facing obstacles in accessing Kenya’s infrastructure.
The CS said the permit will allow UNOC to utilize Kenya Pipeline Company (KPC). ‘s infrastructure without any loss of opportunity for Kenya. UNOC’s direct imports could affect local oil marketing companies in both Kenya and Uganda, as UNOC shifts from supplying primarily state-owned entities to selling to private oil marketers. KPC is expected to maintain its revenue streams as UNOC will continue to utilize its storage facilities and transport network for fuel shipment.
“You will see Unoc getting a licence and then we will see how to work together because usage of our pipeline is an opportunity for us,” Mr Chirchir said.