Four East African countries oppose importing fuel through Kenya
By Patel Okumu |
Kenya faces potential losses amounting to billions of shillings in the oil trade as landlocked East African countries express reluctance to import fuel through Kenya. Uganda has already decided to cease importing fuel via Kenya due to a controversial government-to-government deal, leading to a significant spike in fuel prices.
Kenya faces potential losses amounting to billions of shillings in the oil trade as landlocked East African countries express reluctance to import fuel through Kenya. Uganda has already decided to cease importing fuel via Kenya due to a controversial government-to-government deal, leading to a significant spike in fuel prices.
A CEO of a Kenyan oil firm revealed that Rwanda, Burundi, the Democratic Republic of Congo, and South Sudan are also contemplating reconsidering their oil trade with Kenya, as they are dissatisfied with the government-to-government oil deal and the increased taxes on fuel. The Finance Act 2023 has contributed to elevated fuel costs for East African Community (EAC) countries importing through Kenya.
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Concerns are raised about Kenya's potential loss of dominance in the region, with Tanzania and Sudan emerging as likely beneficiaries if landlocked East African countries shift from using the Port of Mombasa as their petroleum products' entry point. Uganda has already expressed intentions to utilize Tanzania for its reserve fuel stocks. Despite Sudan's current conflict affecting regional trade, its five major ports could serve as an alternative to the Port of Mombasa. Kenya is expected to suffer significant revenue losses, estimated at a minimum of Sh15 billion, if Uganda finalises a deal with Tanzania for fuel imports.
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