Museveni Lifts Lid on Why He Killed Oil Deal With Kenya

President Yoweri Museveni has revealed why Uganda ended its previous petroleum procurement arrangement involving middlemen in Kenya, saying a Kenyan senator first alerted him that the country was purchasing fuel through intermediaries.

Speaking during the groundbreaking of a 320-million-litre Kampala Storage Terminal on September 17, Museveni said the revelation prompted him to question Uganda’s fuel procurement system and seek a new arrangement that would allow the country to source petroleum products more directly from refiners and bulk suppliers.

“So, Uganda, the Republic of Uganda, was buying petroleum products through middlemen in Kenya. And the person who woke me up first was a senator from Kenya. The one who came and told me said, you, you man, do you know that you are buying, your country is buying petroleum through middlemen?,” Museveni said.

Museveni Reveals How Kenyan Senator Exposed Fuel Middlemen

Museveni said he raised the matter with the then Energy and Mineral Development Minister Irene Muloni after learning about Uganda’s reliance on middlemen in Kenya.

“So, I called the then minister, Irene Muloni, I told her, this is a disaster. How can this be?” he said.

According to the president, the issue was not immediately resolved and resurfaced several years later when another group approached the government with an alternative petroleum supply arrangement.

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The development prompted him to question why Uganda was purchasing fuel through traders instead of sourcing it directly from refineries and bulk suppliers.

“The thing to do is for the country to buy from the refiners. Those who are refining, why do you buy from traders?” Museveni said.

He explained that bulk suppliers purchase and store petroleum products before selling them when they are needed.

Museveni said Uganda eventually established links with companies involved in bulk petroleum supply, paving the way for a change in the country’s fuel procurement arrangement.

Uganda Cuts Fuel Import Premiums After Deal Change

Museveni said the change in procurement arrangements resulted in lower premiums paid for petroleum products.

Figures cited during the ceremony showed that the premium on diesel fell from US$118 to US$83 per metric tonne, while the premium on petrol dropped from US$97.50 to US$61.50 per metric tonne.

For aviation fuel, the premium declined from US$114.25 to US$79.25 per metric tonne.

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Meanwhile, the change was followed by a restructuring of Uganda’s petroleum import arrangements, with the Uganda National Oil Company (UNOC) taking a greater role in directly importing petroleum products and supplying oil marketing companies.

In 2024, Uganda moved to end its reliance on Kenyan oil marketing companies for the supply of fuel and instead allowed UNOC to import directly.

Kenya and Uganda subsequently reached an agreement allowing UNOC to use the Port of Mombasa and Kenya Pipeline infrastructure to transport petroleum products into Uganda.

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A photo showing President Museveni welcoming the Pearl Sweet crude blend. Photo Courtesy