More trouble for Kenya as other FOUR countries join Uganda to ditch Kenyan fuel
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Four East African countries reluctant to import fuel through Kenya after Uganda over government-to government deal
Four East African countries reluctant to import fuel through Kenya after Uganda over government-to government deal.
Kenya is likely to lose billions of shillings in oil trade after landlocked East African countries started showing reluctance to import their fuel through Kenya.
Due to the contentious government-to-government agreement between the Kenyan government and the Gulf countries, which has resulted in a sharp increase in fuel prices, Uganda has already decided to cease importing fuel through Kenya.
Speaking to the BBC, the CEO of a Kenyan oil company disclosed that South Sudan, Burundi, Rwanda, and the Democratic Republic of the Congo were all considering doing business with Kenya in the oil sector.
The four countries due to lack of a seaport import most of their petroleum products through Kenya.
It has been revealed that the countries are unhappy with both the higher fuel taxes and Kenya’s government-to-government oil arrangement.
Fuel imports via Kenya are now more expensive among EAC countries due to the higher taxes and levies introduced by the Finance Act 2023.
“The region is not asleep and has aligned infrastructure projects to manage our dominance. It has options and in the long run, Kenya shall lose big time,” the CEO warned.
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Tanzania and Sudan are the likely beneficiaries should landlocked East African Countries drop the Port of Mombasa as the entry point of their petroleum products.
Uganda has already indicated that it will use Tanzania to keep its reserve fuel stocks.
Although Sudan is currently embroiled in conflict which has stalled regional trade, it has five major ports that can serve as an alternative to the Port of Mombasa.
Uganda used to import 90 per cent of its fuel from Kenya with only 10 per cent from Tanzania signalling how much Kenya is going to lose because of the controversial oil deal and unfavourable business ecosystem.
Additionally, 40 per cent of Kenya’s total fuel imports find their way to DRC and South Sudan mostly through Uganda.
Kenya is expected to lose a minimum of Ksh15 billion in revenue should Uganda finalise a deal with Tanzania over the importation of fuel.
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