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Uganda petroleum procurement and pricing dynamics
Overview
Uganda has faced economic challenges regarding fuel pricing, characterized by ‘asymmetric price transmission.’ This phenomenon involves retail costs rising quickly in response to global crude oil increases while failing to decrease significantly when wholesale costs drop, creating a ‘ratchet’ effect that burdens the transportation, agriculture, and manufacturing sectors.
In response to procurement concerns, President Yoweri Museveni criticized previous arrangements as a “government-to-middlemen” model that allowed Kenyan intermediaries to fleece the country. During reflections on his 82nd birthday, Museveni revealed that the late Kenyan politician Cyrus Jirongo had alerted him as early as 2019 to irregularities in Uganda’s petroleum procurement.
To address this, Uganda transitioned to direct imports via the Uganda National Oil Company (UNOC) in partnership with Vitol. Officials report this shift has reduced fuel premiums for diesel, petrol, and aviation fuel.
Kenyan President William Ruto has defended Kenya’s government-to-government (G2G) fuel importation model, which was established in 2023 to mitigate US dollar shortages and ensure fuel security. Ruto argued the G2G framework is efficient and cost-effective, as it eliminates brokers by dealing directly with producers. Meanwhile, the Motorist Association of Kenya has previously called for a forensic audit of the Kenyan procurement system.
Entities
Ministry of Energy and Petroleum · Cyrus Jirongo · Energy and Petroleum Regulatory Authority · William Ruto · Vitol
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 6 SOURCES] The late Cyrus Jirongo alerted Museveni in 2019 that Uganda was purchasing petroleum through middlemen in Kenya. nexusmedia.ug · westernkenyatimes.co.ke · www.europesays.com · www.spyuganda.com · uzalendonews.co.ke · +1 more
- [● 5 SOURCES] Uganda changed its petroleum procurement model in 2023 by partnering with Vitol and the Uganda National Oil Company (UNOC). taifaleo.nation.co.ke · westernkenyatimes.co.ke · www.europesays.com · www.spyuganda.com · www.kenyans.co.ke
- [● 3 SOURCES] Uganda's petroleum import costs decreased following the 2023 shift in procurement strategy. taifaleo.nation.co.ke · www.europesays.com · www.spyuganda.com
- [● 2 SOURCES] Kenya's government-to-government (G2G) fuel deal was introduced in 2023 to address US dollar shortages. businesstoday.co.ke · www.pulse.co.ke
- [○ 1 SOURCE] President William Ruto defended the G2G model, stating it ensures fuel is supplied by producers without middlemen. nairobileo.co.ke
- [○ 1 SOURCE] President Museveni called for deeper African economic integration and a stronger common market. nexusmedia.ug
Timeline
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[INTERNATIONAL] 13 sourcesMuseveni identifies Kenyan whistleblower in Uganda fuel procurement dispute
President Museveni revealed that Kenyan politician Cyrus Jirongo alerted him in 2019 to fuel middlemen in Uganda. Museveni has since shifted to a new procurement model involving Vitol and UNOC.
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[BUSINESS] 5 sourcesUganda fuel prices face asymmetric price transmission
Uganda faces a ‘ratchet’ effect in fuel pricing, where retail costs rise quickly with global crude prices but rarely decrease when wholesale costs fall, impacting various economic sectors.
Sources
banglamirrornews.com · businesstoday.co.ke · europesays.com · kahawatungu.com · kenyans.co.ke · lankanewspapers.com · mulengeranews.com · nairobileo.co.ke · newsplex.nation.co.ke · nexusmedia.ug · panafricanvisions.com · pulselive.co.ke · radiogeneration.co.ke · spyuganda.com · taifaleo.nation.co.ke · tob.news · uzalendonews.co.ke · westernkenyatimes.co.ke
This summary has been updated 1 time: see revision history