NAIROBI, Kenya- Kenya and Uganda are engaging in significant discussions to extend the petroleum pipeline to Kampala, marking a crucial development in the region’s fuel import market.
This move comes as Uganda begins importing its own oil products, ending Kenya’s long-standing role in managing the supply of refined products for the landlocked nation.
Uganda’s shift towards self-sufficiency in fuel importation began in early July, facilitated by a deal between the Uganda National Oil Corporation (Unoc) and Vitol Bahrain.
This arrangement mirrors Kenya’s government-to-government deal with Gulf oil majors, aiming to reduce pump prices for Ugandan consumers.
Despite this new independence, Uganda continues to use Kenya’s Port of Mombasa and Kenya Pipeline Company’s (KPC) infrastructure for delivery to Eldoret, with the final leg completed by road.
Uganda’s Minister of Energy and Mineral Development, Ruth Nankabirwa, led a delegation to Nairobi for the initial planning stages of the pipeline extension.
The first meeting, held this week, included key discussions with Kenya’s Petroleum PS Mohamed Liban and KPC Managing Director Joe Sang.
Nankabirwa emphasized the importance of understanding Kenya Pipeline’s operations, infrastructure, and capacity as part of the preparation process.
The proposed pipeline, conceived in 1995 under a Memorandum of Understanding (MoU) between Uganda and Kenya, aims to enhance the supply and security of petroleum products in Uganda.
The feasibility study for the Eldoret to Kampala extension, conducted in the late 1990s, confirmed the project’s viability, including a potential extension to Rwanda.
In May, Presidents William Ruto of Kenya and Yoweri Museveni of Uganda revived plans for the pipeline extension.
Kenya is set to build a line from Eldoret to Malaba, while Uganda will construct a link to Kampala. The pipeline may eventually extend to Kigali, Rwanda, and possibly Bujumbura, Burundi, with each country responsible for developing the infrastructure within its borders.
This development positions Kenya favorably in the regional petroleum market, potentially regaining market share lost to Tanzania.
Uganda imports approximately 2.5 billion liters of petroleum annually, with Kenya Pipeline Company handling 90pc of these volumes.
Nankabirwa’s visit also addresses cost-related issues, such as the doubling of bond fees for cargoes destined for Kampala and KPC pipeline charges, impacting pump prices and exports.
Beyond the pipeline, Kenya and Uganda are also considering extending the Standard Gauge Railway from Naivasha to Malaba and further to Kampala and the Democratic Republic of Congo (DRC).
This expansion aims to create an efficient and sustainable transport artery for goods, enhancing regional trade and connectivity.
The extension of the petroleum pipeline to Kampala represents a pivotal step in strengthening regional infrastructure and cooperation between Kenya and Uganda.
