Uganda has taken legal action against Kenya over a contentious petroleum oil importation deal from the Mombasa port. The Ugandan government, through its Attorney General, applied to the East African Court of Justice, alleging that the Kenyan government has obstructed the Energy and Petroleum Regulatory Authority (EPRA) from granting a license for the importation of oil from Mombasa to Uganda.
According to court documents filed on December 28, 2023, Uganda contends that approximately 90 percent of its refined petroleum products are imported through the Port of Mombasa in Kenya, with transportation to Uganda facilitated by the Kenyan Pipeline Company Limited (KPC).
Traditionally, the importation and supply of refined petroleum products into Uganda have been managed by Oil Marketing Companies (OMCs) in Kenya, operating through the Kenya Open Tender System (OTS) and government-to-government arrangements. However, Uganda argues that this heavy reliance on Kenyan OMCs has left the country vulnerable to supply disruptions, leading to an unnecessary surge in fuel prices.
In response to these challenges, the Ugandan government, through the Uganda National Oil Company (UNOC), shifted its policy on the sourcing, importation, and supply of petroleum products for the domestic market. This shift empowered UNOC to be the exclusive importer and supplier of all petroleum products for Uganda.
In April 2023, Uganda engaged with Kenyan authorities to discuss the implementation of this new policy. The Kenyan authorities, by treaty principles and protocols, assured Uganda of their support. Subsequently, UNOC sought to enter into a Storage and Transportation Agreement with the Kenyan Pipeline Company (KPC). However, the process hit a roadblock as EPRA imposed regulatory requirements, including the need for an Import, Export, and Wholesale of Petroleum Products license for UNOC.
Uganda contends that these requirements pose an unnecessary hindrance to the implementation of its petroleum policy, emphasizing that the petroleum products in question are transit goods and not intended for domestic consumption in Kenya. The legal dispute raises questions about cross-border trade dynamics and the balance of interests between the two East African nations.