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Uganda, Kenya moot petrol pipeline plan revival

Peter 30th Jul, 2024 Energy Pedson Mumbere

A pipeline under construction. Pipelines are popular worldwide for their convenience and affordability as a means of transporting liquids.

Regional counterparts Uganda and Kenya are set to revive a long-standing plan to construct a pipeline that will enhance the transportation of fuel between the two countries. The project, initially proposed in 1995, aims to establish a pipeline from Eldoret in western Kenya to Kampala in Uganda, with potential extensions to Rwanda and Burundi.

The initiative, if successful, could significantly impact the regional energy market by providing a more stable and cost-effective supply of petroleum products.

The original proposal emerged from the Joint Coordinating Commission (JCC) and led to a Memorandum of Understanding between the two nations. A feasibility study was completed in 1999, but the project stalled for years.

But recently, Ugandan and Kenyan officials, including Minister of Energy and Mineral Development, Ruth Nankabirwa, met in Kampala and reignited interest in the project. These talks are a continuation of discussions between Presidents Yoweri Museveni and William Ruto, who, in May, urged their ministers to expedite the pipeline's development.

"We are committed to ensuring that this pipeline becomes a reality," said Minister Nankabirwa. "It is not just about securing a stable fuel supply but also about strengthening our regional cooperation and economic integration."

Currently, Uganda imports about 90% of its fuel through Kenya, amounting to an average of 2.5 billion liters of refined petroleum products annually. This import is valued at approximately 2.5 billion dollars (9.3 trillion Ugandan shillings). The reliance on Kenyan ports for fuel imports has made Uganda susceptible to logistical challenges and price fluctuations.

The proposed pipeline could alleviate these issues by providing a direct, reliable route for fuel transport, thus stabilizing supply and reducing costs.

"By constructing this pipeline, we aim to create a more efficient and reliable fuel supply chain," Nankabirwa explained. "This will reduce our dependence on Kenyan ports and mitigate the impact of price volatility."

The pipeline project also has broader regional implications. By extending the pipeline to Kigali in Rwanda and potentially Bujumbura in Burundi, the initiative could foster greater economic integration in the East African Community. Each country would be responsible for constructing and maintaining the pipeline within its borders, creating a collaborative infrastructure project that benefits multiple nations.

The timing of the pipeline's revival is significant, as Uganda has recently started importing fuel directly from the Middle East through the logistics company Vitol. This move bypasses Kenyan marketing companies, which have been partly blamed for high fuel prices in Uganda. The direct importation strategy has already shown promise in lowering costs and increasing supply stability.

"The direct imports from the Middle East have been a game-changer," Nankabirwa stated. "It has allowed us to bypass middlemen and ensure that our people receive fuel at more affordable prices."

However, the pipeline's viability is not guaranteed. Uganda and Kenya face competition from Tanzania, which offers alternative routes through its ports of Dar-es-Salaam and Tanga. The new pipeline must be cost-competitive and efficient to prevent a shift in regional trade dynamics. The ability to quickly implement and manage the pipeline will be crucial in retaining Uganda's reliance on Kenyan routes.

The proposed revival of the 30-year-old petroleum pipeline plan between Uganda and Kenya represents a significant step towards regional energy security. The collaboration between the two countries, backed by political will and strategic planning, could transform the regional fuel market.

However, the project's success will depend on effective implementation, regional cooperation, and competitive positioning against alternative routes. If successful, the pipeline could become a cornerstone of East Africa's energy infrastructure, benefiting millions across the region.

The pipeline plan could also potentially open up a new war-front with environmental activists who argue that such projects are a threat to the environment.

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