Parliament has approved the Petroleum Supply (Amendment) Act, 2023, which grants the Uganda National Oil Company (UNOC) exclusive rights to supply petroleum products. Despite concerns that this decision might exacerbate existing issues, the bill, introduced on October 31 and swiftly endorsed by 186 members, awaits the President’s assent.
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Once enacted, the law will empower UNOC, a government-owned limited liability company responsible for the state’s commercial interests in the petroleum sector, to import all specified petroleum products for the Ugandan market. Prior to this amendment, licensed Ugandan oil marketing companies independently handled petroleum product imports through structures in Kenya and Tanzania.
The revised legislation also eliminates provisions encouraging fair competition, signaling a departure from efforts to prevent monopolistic control. A previous act, designed to ensure fair competition, awaits the President’s approval.
The government contends that this shift aims to reduce dependence on private oil marketing companies and eliminate intermediaries, factors believed to contribute to supply instability and unpredictable pump prices. Minister of Energy and Mineral Development, Ms. Ruth Nankabirwa, expressed optimism about competitive prices, emphasizing the move’s intent to benefit Uganda.
However, some legislators, as indicated in a minority report, argue that designating UNOC as the sole importer and supplier may not effectively address high fuel prices. Paul Akamba, Busiki County MP, raised concerns about the lack of price competitiveness with a monopolistic player. Additionally, debates surround UNOC’s collaboration with Vitol Bahrain, a contracted monopoly tasked with sourcing products directly from refineries.
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