President Museveni has said the Government of Uganda is taking over the importation of all petroleum products because of what described as years of kuseerwa (being over charged) by middlemen of Kenya.
In a statement issued on Sunday, 05 November 2023, the President said the problem was created by civil servants whom he said negotiated with the middlemen in Kenya to cheat Uganda.
“When we came into Government, we assumed that the Civil Servants would deal with money, administration, procurement, etc., and we would deal with policy, ideology, strategy, security, etc. However, in a number of cases, these wonderful People, really let down their country,” he wrote.
The President cited the prices of different petroleum products where the middlemen are earning more than 40% profit from selling to Uganda.
For instance, he cited the middlemen’s price for a tonne of petrol at $97.5 against the bulk suppliers or refiners’ price of $61.5; diesel at the middlemen’s price of $118 per tonne, compared to the bulk suppliers or Refiners’ price of $83 per tonne.
“These are prices when the products have arrived at the East African Ports. You can see the huge loss Uganda has been incurring on account of our wonderful people,” he added.
The head of state described as strange that the whole country can buy petroleum products from middlemen.
“Without my knowledge, our wonderful People, were buying this huge quantity of petroleum products from middlemen in Kenya. A whole country buying from middlemen in Kenya or anywhere else!! Amazing but true,” he said.
“Why not buy from the Refineries abroad and transport through Kenya and Tanzania, cutting out the cost created by middlemen? Those involved were not bothered by these issues,” he said.
He said when he learnt of the level of exploitation, he decided to intervene.
“We have now contracted bulk and Refinery suppliers able to give us the lower prices. I have discussed this with H.E Ruto, the President of Kenya and our delegation is now in Dar-es-Salaam, discussing with Her Excellency Samia Suluhu.
H.E Ruto is handling the Kenyan part. I salute his contribution. In a few years’ time, our Refinery will be up and running.
I can assure the Inland East Africans of competitive petroleum products, free of distributions caused by middlemen. The whole of Uganda, North- Western Tanzania, Rwanda, Burundi, Western Kenya, South Sudan and Eastern DRC, will benefit.”
This comes after the Government through the Ministry of Energy last week tabled a Bill before Parliament that seeks to give the Uganda National Oil Company (UNOC) exclusive rights to import refined petroleum products.
According to the Petroleum Supply (Amendment) Bill, 2023, which was tabled in Parliament by Energy Minister Ruth Nankabirwa, UNOC, after importing the petroleum products, will then sell them to more than 40 oil marketing companies in the country.
Parliament will, under clause 1 of the Bill, amend Section 3 of the Petroleum Supply Act, 2003, in order to empower UNOC to import all petroleum products destined for the Ugandan market.
“The Petroleum Supply Act, 2003, does not empower UNOC to supply all imports to the licensed oil marketing companies of petroleum products for the Ugandan market. This gap in the Act has threatened the security of supply of petroleum products in Uganda,” she said.
“The gap in the Act has exposed Uganda to occasional vulnerability to access the committed demand volumes of petroleum products, leading to petroleum product shortages and abrupt increase in retail pump prices,” she added.
The fourth clause seeks to amend the principal Act by inserting a new schedule to provide a list of petroleum products to be sourced and supplied by UNOC.
“Licensed oil marketing companies shall purchase all their petroleum products requirements from the UNOC or such other person nominated by the minister under subsection (4),” part of the proposed Bill reads.
“With the amendment of the Petroleum Supply Act, the Ministry of Energy and Mineral Development shall maintain its overall responsibility of regulating the importation of petroleum products into Uganda,” the minister said.