Museveni says ‘lies’ made Uganda stop buying fuel from Kenyan ‘brokers’

Uganda’s president Yoweri Museveni now says his country stopped buying its fuel through Kenya because of deceit, claiming that the move saved millions of shillings.

Mr Museveni has also termed the government-to-government (G2G) oil importation deal as a “government-to-middlemen” arrangement. Uganda largely relies on the Kenyan port of Mombasa for its oil imports

The Kenyan government has responded with a diplomatic touch, saying the ties between the two countries remain strong.

On Saturday, Government Spokesman Charles Owino told the Nation: “We have a good working relation with Uganda. They are well represented in the Kenya Pipeline board. We are going to have joint ventures with Uganda on future oil infrastructure.”

Mr Museveni has since received the backing of former Deputy President Rigathi Gachagua who has gone further to say the deal was an individual arrangement for private benefit and not the Kenyan government’s. Mr Gachagua, while addressing a forum in the US, was particularly critical of the G2G deal, claiming the beneficiaries were in the Kenya Kwanza administration.

“It’s a very lucrative trade because it’s in billions of dollars,” Mr Gachagua alleged.

Mr Museveni, speaking in Uganda on Thursday, said a Kenyan senator brought it to his attention about seven years ago that Ugandans were being fleeced by purchasing the products sourced by Kenya.

He accused the officials in his government who were in charge of petroleum of sleeping on the job and not realising that there was a cheaper pathway to acquiring fuel for Uganda.

“The Republic of Uganda was buying petroleum products through middlemen in Kenya. Can you imagine that? I didn’t know,” said Mr Museveni.

“The person who woke me up first was a senator from Kenya. He’s the one who came and told me, ‘You man, do you know that your country is buying petroleum through middlemen?’ I didn’t know. I called the then minister, Irene Muloni, I told her, ‘This is a disaster. How can this be?’” Mr Museveni added. “But she did nothing. Until later, again, after some years, when some people brought me this [oil importation] group.”

The president’s statement is, however, confusing as Ms Irene Muloni was Energy minister until 2019, way before President Ruto’s administration that took over in 2022 initiated the Government-to-Government arrangement with Gulf-based suppliers the following year. 

Uganda currently sources its fuel through a partnership between the Uganda National Oil Company (Unoc) and Vitol, an independent Bahraini fuel firm. This follows a policy shift formalised in 2023. Before then, Uganda had a long-standing reliance on Kenyan oil marketing companies for fuel procurement.

Most of the country’s petroleum products went through the Port of Mombasa and the Kenya Pipeline Company network, with Ugandan retailers buying via affiliated firms and traders in Kenya.

The change caused strife between Kenya and Uganda as Kenya’s Energy and Petroleum Regulatory Authority initially declined to licence Unoc as an oil marketer. A compromise later allowed Unoc to use Mombasa and the Kenya Pipeline network. Unoc said its first consignment under the sole importation mandate arrived in July 2024.

Presidential adviser David Ndii sought to counter the narrative on Saturday by posting on X that the two companies that supply Kenya with fuel are owned by their respective governments. He also posted information showing that the firm that Uganda is buying from is privately owned.

“Who is buying from middlemen? Be the judge,” posted Dr Ndii, who also noted in a separate post that Mr Museveni was referring to the situation nine years ago – in 2017.

In his speech, Mr Museveni said he was the one who caused the change.

“I had to come in and say this must end. And it ended,” he said.

At the event, Mr Museveni had Energy Permanent Secretary Irene Batebe read the steep prices that Uganda was paying for fuel products to illustrate, in his own words, “how the middlemen in Kenya were cheating us”.

For diesel, she said, on average Uganda used to pay $118 (Kenyan shillings 15,340) per metric tonne. Now that figure is $83 (Sh10,790).

In terms of petrol, the initial price was $97.5 (Sh12,675) per metric tonne, compared to the current figure of $61.5 (Sh7,995).

Regarding jet fuel, Ms Batebe said, Uganda used to pay $114.25 (Sh14,852.50) and now it pays $79.25 (Sh10,302.50).

“I will never forget those figures,” said Mr Museveni. “But you wonder, the commissioners for all those years, what were they commissioning? That was kulala (sleeping).”

Mr Museveni explained that with its new arrangement, Uganda is now buying fuel from “people who had refineries”.

“They buy petroleum, keep it, when it is needed, they sell,” he added.

Said Mr Gachagua: “I’m happy that President Museveni has realised that Uganda has been conned by William Ruto. I think he just fell short of naming his Kenyan counterpart. I think he was just being decent because of diplomatic relations between the two countries. But that sometimes vindicates me.”

The Kenya Kwanza administration initially presented the government-to-government petroleum arrangement as an emergency stabilisation measure rather than a permanent replacement for normal market procurement.  Dr Ruto’s administration said the deal was initiated in early 2023 when the petroleum sector’s monthly demand for dollars – which was about $500 million (Sh64.7 billion) – was straining foreign-exchange reserves, threatening fuel security and worsening shortages of dollars needed by other import-dependent sectors such as food and agriculture.

Under the arrangement, Kenya contracted Gulf suppliers including Saudi Aramco, ADNOC and ENOC, with fuel supplied on extended credit.

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