Maiden Fuel Consignment under Sole Importation Mandate Arrives
As the sun’s rays emerged through the cloud cover, a water vessel arrived at Mombasa, Kenya. Immediately, smaller vessels sailing on its sides, released jets of water in what is known as a “salute”.
NAVIG8 Martinez’s arrival with 58,000 metric tonnes of petrol on July 3rd, 2024, and Sinbad with 80,000 metric tonnes of diesel a day later, marked the beginning of UNOC’s sole importation of petroleum (fuel) products mandate.
The Ugandan officials’ excitement was evident as months of preparation and planning culminated in the first fuel consignment. According to the CEO, Proscovia Nabbanja, the company is now active in all segments of the petroleum value chain. In March 2020, UNOC ventured into the bulk trading business, delivering 430,000 litres of diesel to an oil marketing company (OMC).
“While starting the journey, we had the end in mind linking this business to our planned 60,000-barrels-of-oil-per day refinery project, building our capabilities to ready to participate in the offtake of the refined petroleum products when the refinery is commissioned: contributing to the security of supply for the country,” Nabbanja stated.
UNOC, according to Nabbanja, partnered with Vitol Bahrain, who will supply all the fuel. “We are ready because the negotiations and agreements we have signed will enable us to deliver the three value propositions we committed to our customers, the Uganda oil marketing companies. These are quality, products, competitive prices and supply reliability,” she explained. “We are ready because we have been well guided and supported to comply with the products importation requirements equally in Kenya.”
Monthly, UNOC will import 180 metric tonnes of fuel products. One metric tonne is equal to 1,000 litres, implying that 180 million litres of fuel will be imported by UNOC. According to the Ministry of Energy, Uganda consumes about 6.5 million litres of fuel products per day. The 180 million would be sufficient for close to a month.
The Minister of Energy and Mineral Development, Hon. Dr. Ruth Nankabirwa said that sole importation by UNOC would serve three purposes- “addressing Uganda’s security of supply, capacity building for UNOC and reducing the pressure on the national treasury”.
The deal, she added, would enable UNOC to address the forces of demand and supply eventually stabilising pump prices.
Ahead of the first consignment, Uganda and Kenya signed a Tripartite Agreement (TPA). The parties to the TPA are the Governments of Uganda, Kenya and UNOC. The other is the Transport and Storage Agreement between UNOC and the Kenya Pipeline Company (KPC). KPC infrastructure namely the storage terminals and the pipeline from Mombasa to Nakuru, Kisumu and Eldoret will facilitate the importation.
In March 2024, the Energy and Petroleum Regulatory Authority of Kenya handed UNOC a license. Over 90% of Uganda’s petroleum products, totalling approximately 2.5 billion litres valued at about US$2 billion annually, are imported via Kenya infrastructure-ports, KPC and roads.
Last year, Uganda enacted the Petroleum Supply (Amendment) Act, 2023, empowering UNOC as the sole importer. This was prompted by Kenya's policy shift from the Open Tender System (OTS) to Government-Government (G2G), a process deemed lengthy with numerous stakeholders whose profit margins could impact pump prices.
A UNOC branch was established in Nairobi, Kenya to facilitate collaboration with stakeholders such as KPC. Ahead of the first consignment UNOC met the OMCs, providing them with insights into this transition and assuring them of punctual and sufficient deliveries.
UNOC is wholly owned by the Government of Uganda and is mandated to ensure the State’s commercial interests in the oil and gas sub-sector. It has projects in the Upstream, Midstream and Downstream segments of the petroleum value chain.
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