MPS question gov’t agreement monopolizing import of Petroleum products

The MPs on Natural Resources Committee of Parliament have questioned the recently signed agreement giving monopoly to Vitol Bahrain to import petroleum products in Uganda.

This was after the Minister for Energy and Mineral Development, Ruth Nankabirwa revealed to the committee that the Ugandan government has entered into an agreement with Vitol Bahrain, a Middle Eastern company, to monopolize the importation of petroleum products. The said monopoly comes as a response to the ongoing challenges of increasing fuel prices in the country.

The Committee on Environment and Natural Resources recently held discussions with Minister Ruth Nankabirwa and the Attorney General, Kiryowa Kiwanuka, shedding light on the government’s partnership with Vitol Bahrain.

Under this agreement, Vitol Bahrain will supply fuel to the Ugandan Company UNOC, which will then distribute it for final consumption and retail in Uganda.

While the agreement was signed without prior disclosure, the lack of a legal framework to support its implementation has raised concerns.  Attorney General Kiryowa Kiwanuka however explained to the committee that the agreement would only become operational after the passing of the Petroleum Amendment Bill 2023 which was recently tabled before Parliament.

“While this may raise concerns among members of parliament, the agreement’s enforcement is contingent on the passage of the Petroleum Amendment Bill 2023.” Kiryowa stated.

The revelation sparked contention among committee members who questioned why the government opted to involve a middleman, Vitol Bahrain, rather than handling the shipping of fuel itself. Government officials responded that this arrangement would be considered only if sufficient funds become available.

UNOC fuel tanks

Members of Parliament also expressed concerns about Vitol, emphasizing its questionable track record with continued price hikes in its costings. The committee further questioned who would regulate the monopolized company, prompting discussions about potential backtracking on the government’s liberalization policy.

Simultaneously, the committee has initiated the scrutiny of the Petroleum Amendment Bill, which includes amendments aimed at empowering the Uganda National Oil Company to be the sole supplier of all imported petroleum products. Advocates of this amendment argue that it will enhance stock holding levels and improve control over the petroleum market.

The government’s partnership with Vitol Bahrain is set to play a pivotal role in addressing the challenges posed by rising fuel prices and ensuring a steady supply of petroleum products to Ugandan consumers.