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Uganda begins oil shipments through Dar es Salaam port
Uganda says it is seeking to find alternatives that ensures that its petroleum supplies are secure. Photo / File
What you need to know:
- UNOC says that Uganda plans to transport approximately 36 million litres of oil each month - equivalent to 1,028 truckloads - through Dar es Salaam
The Uganda National Oil Company (UNOC) has begun shipping oil products through the Port of Dar es Salaam.
Previously, UNOC utilised the Port of Mombasa in Kenya and relied on the Kenya Pipeline Company (KPC) for transportation.
A statement signed by UNOC chief executive officer Proscovia Nabbanja, noted that Uganda plans to transport approximately 36 million litres of oil each month - equivalent to 1,028 truckloads - through the Port of Dar es Salaam.
However, UNOC expects that the volume to increase over time.
The first shipment of 18 million litres (520 truckloads) has begun loading in Dar es Salaam and is expected to arrive in Kampala in the coming days.
The agreement between the Dar es Salaam Port and UNOC was established from May 24 to May 25, 2024, during the Second Business Forum held in Dar es Salaam.
During the forum, the two countries agreed to enhance oil and other product transportation routes through Dar es Salaam instead of Mombasa.
This decision was prompted by technical and cost issues associated with using the Mombasa port, leading Uganda to seek Dar es Salaam as an alternative.
Tanzania’s Deputy Prime Minister and Minister of Energy Dr Doto Biteko, said the agreements sought to strengthen economic relations, particularly in the energy and industrial sectors.
“This meeting aimed to enhance infrastructure and foster cooperation in trade and industry,” Dr Biteko said.
Earlier this year, Uganda began negotiations with Tanzania to use the Dar es Salaam Port for its oil imports, intending to end reliance on Kenya’s Mombasa port.
Uganda’s dissatisfaction with the current system, where its fuel companies acquire 90 percent of their supplies through affiliated firms in Kenya, led to this decision.
President Museveni expressed concerns about supply disruptions and high fuel prices.
In response, Uganda announced in November 2023, that it would transfer exclusive rights for petroleum supply to a unit of global energy trader Vitol.
Uganda imported approximately $1.6 billion worth of petroleum products in 2022, most of which came from the Gulf region.
Although Uganda initially planned to continue imports through Kenya, Energy Minister Ruth Nankabirwa reported that the Kenyan government refused to grant the necessary license.
“We are negotiating with the Tanzanian government, and I will meet with Her Excellency, the President, on this matter,” Ms Nankabirwa said earlier this year.
“We want to find a route that ensures the security of our petroleum supplies.”
