{"id":14178,"date":"2021-07-17T14:27:54","date_gmt":"2021-07-17T14:27:54","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/?p=14178"},"modified":"2021-07-17T13:52:03","modified_gmt":"2021-07-17T13:52:03","slug":"tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade","title":{"rendered":"Tanzania, Kenya in fight for lucrative Uganda petroleum trade"},"content":{"rendered":"

Africa-Press<\/a> – Uganda<\/a>. <\/strong><\/span>The rising political temperatures in Kenya over the Uhuru Kenyatta succession are likely to take a toll on the country\u2019s trade with its East and Central African partners, with importers and transporters on the Northern Corridor already exploring new routes for their cargo.<\/p>\n

Just this week, Uganda began a trial delivery of petroleum products from the Dar es Salaam port through Lake Victoria, after a 16-year break. This move spells doom to the Port of Mombasa, which accounts for three-quarters of the transit cargo headed for Uganda.<\/p>\n

Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo (DRC) import a huge percentage of their petroleum products using trucks through Kenya. Refined petroleum, which forms 13 per cent of Kenya\u2019s total exports, is the country\u2019s third-largest export after tea and cut flowers.<\/p>\n

Uganda Railways Corporation took 500,000 litres of petroleum products across Lake Victoria from Tanzania. The fuel had landed in Dar es Salaam and was transported by train to the Mwanza port, then to Uganda through the lake.<\/p>\n

Now, with Kampala looking to Dar, the potential loss of the lucrative petroleum transshipment business has jolted officials in Nairobi, according to sources. Kenya invested $400 million in the rehabilitation of its oil pipeline network from Mombasa to Eldoret, and holding facilities in Eldoret. It also constructed a $170 million fuel jetty in Kisumu in anticipation of transferring part of the fuel via Lake Victoria.<\/p>\n

While some state officials have put on a brave face, the chipping away of business is likely to increase as the country enters full electioneering mode in the coming months.<\/p>\n

The General Election is slated for August 2022 and the battle lines are already drawn.<\/p>\n

The falling-out between President Kenyatta and his deputy Dr William Ruto is causing jitters and a bare-knuckle duel is shaping up between the two estranged politicians, who were elected on the same ticket in the elections in 2013 and 2017.<\/p>\n

On Thursday, Dr Ruto drew the first blood when his party United Democratic Alliance won its first parliamentary seat in a high-stakes by-election in Kenyatta\u2019s backyard in Kiambu County.<\/p>\n

The developments in Kenya have brought back memories of the 2007\/08 political crisis after a contested presidential election result when operations in part of the transport corridor stretching from the Mombasa port city to the Great Lakes were paralysed by post-election violence.<\/p>\n

Both Mr Kenyatta and Dr Ruto were charged with crimes against humanity at the International Criminal Court in The Hague, but the charges were dropped largely due to lack of evidence and alleged witness tampering.<\/p>\n

Transport companies from Uganda and Rwanda were awarded Ksh12.3 billion ($113 million) for losses incurred in the violence. Intraspeed Logistics Ltd, Kampala City Traders Association, Willex Uganda Ltd, KPI Ltd, Katraco Uganda Ltd, Dooba Enterprises, Sebco Uganda, Bunyonyi Safaris, Seven Hills Impex, Uganda Agricultural Tools, Mugenga Holdings, Board City Company and Bidco Uganda Ltd lost vehicles and goods. Kenyan High Court judge Msagha Mbogholi awarded them Ksh6.3 billion ($58 million)as compensation for loss of business and special damages, and another Ksh6 billion ($55 million)as interest on the principal amount. They are yet to be paid by the Kenyan government.<\/p>\n

No impact<\/b><\/p>\n

Kenya Pipeline Corporation managing director Macharia Irungu told The EastAfrican that Uganda\u2019s attempt to re-route shipments through Tanzanian ports of Dar es Salaam and Tanga would not impact its business much, noting that less than three percent of the fuel cargo will go through the Central Corridor.<\/p>\n

\u201cWe are in a better position as KPC, I am not worried,\u201d Mr Macharia said. \u201cWe won\u2019t lose more than three percent of the cargo volume.\u201d<\/p>\n

Kenya transports about 900 million litres of petroleum products per month and is banking on Tanzania\u2019s inadequate fuel transport infrastructure to retain the Ugandan petroleum transhipment business.<\/p>\n

\u201cTanzania doesn\u2019t have the infrastructure,\u201d said the KPC boss. \u201cOur route is cheaper and more organised, and they can secure their taxes. Tanzania will not secure their taxes because there are no controls.\u201d<\/p>\n

With an inadequate pipeline infrastructure, Tanzania will have to rely on trucks to evacuate the fuel from its port into the shores of Lake Victoria, before it is shipped to Uganda, something Kenya says will be a hard-sell, mostly because of delays and possible adulteration.<\/p>\n

\u201cIt is expensive to ferry products by road. We normally pump one million litres per hour through the pipeline from Mombasa to Nairobi. When you look at the logistical and operational aspects, it will take Tanzania years to wrest the Ugandan market from us,\u201d Mr Macharia said.<\/p>\n

Uganda Railways Corporation (URC) acting managing director Stephen Wakasenza told Bloomberg this week that while they \u201care comfortable with Mombasa,\u201d they were seeking an alternative route \u201cfor strategic reasons\u201d.<\/p>\n

\u201cWe are targeting oil because it is a product used daily,\u201d he said.<\/p>\n

Kenya\u2019s position as the preferred petroleum products importation route for landlocked East and Central African nations started slipping out of its hands in 2015, when EAC countries, save for Uganda, reduced their oil imports from Nairobi due to concerns over adulteration.<\/p>\n

Uganda receives over 185 million litres of petroleum products, mostly channelled through the Kisumu port and the Eldoret depot.<\/p>\n

\u201cWe now aim to use two routes across Lake Victoria from Kenya\u2019s Kisumu port, and Tanzania\u2019s Mwanza port to bring in up to 20 million litres of petroleum products monthly,\u201d Mr Wakasenza said.<\/p>\n

The Kisumu port supplies Kampala with up to six million litres of petroleum products monthly, using the MV Uhuru I, and there is a plan is to increase the volume once Kenya completes building its second wagon ferry MV Uhuru II.<\/p>\n

In the five months to May, Kenya\u2019s 180-tonne, 91-metre MV Uhuru cargo carrier made 26 round trips to Ugandan ports, moving over 50 million litres of fuel.<\/p>\n

Nairobi has been pushing for the actualisation of its multimodal Lake Victoria transport system to serve the region, but this has been dragged down by Kampala\u2019s delay in completing its oil jetty and refurbishing its ports.<\/p>\n

Kampala has been building a fuel jetty, which was set to be ready by January this year, but whose completion timeline now remains in limbo.<\/p>\n

Uganda, Kenya and Rwanda seem to have abandoned their ambitious Eldoret \u2013 Kampala – Kigali Refined Petroleum Products Pipeline Project, one of the key ventures that the region had initially agreed to jointly invest in, but it now seems to have dropped off their priorities.<\/p>\n

The project was to cost $1.5 billion, with the 350km Eldoret to Kampala costing $400 million, while the 434km Kampala to Kigali pipeline was to cost $1.1 billion. The project would also see the construction of the mainline pumps, intermediate pump stations and road or rail loading facilities for tankers.<\/p>\n

The initial design requirement would also have accommodated a bi-directional flow with the installation of pumping stations to take products from Hoima refinery via Kampala Terminal back to Kenya and an option to feed into the Kampala-Kigali pipeline.<\/p>\n

Perfect timing for Tanzania<\/p>\n

The move by the region\u2019s importers to look for alternative routes could not have come at a better time for Tanzania. The Samia Suluhu Hassan administration has been angling for the shipping and logistics business and the Tanzanian leader has aggressively sold her country as a stable environment for doing business in the region.<\/p>\n

This weekend, President Samia is visiting Burundi to sell her country as a business and investment destination of choice.<\/p>\n

Burundi uses the Central Corridor for most of its cargo and the visit is meant to cement the existing deals and open up others.<\/p>\n

President Samia has offered incentives to investors and the Tanzanian ports, while suffering administrative and capacity problems, have been bracing to eat Mombasa\u2019s lunch.<\/p>\n

Tanzania, home to the most ambitious port project in the region \u2014 the $10 billion Bagamoyo Port \u2014 has announced plans to revive its construction, potentially turning the tables on its competitors. The project features a special economic zone and industrial park that are billed to attract at least 700 business units and dominate the freight business along Africa\u2019s Indian Ocean coastline, eclipsing Kenya\u2019s equally ambitious Lamu port project.<\/p>\n

Kenya has announced incentives to encourage more shipping lines to use the Mombasa and Lamu ports as the gateway to the Eastern Africa region. These include exempting fuel supplied to shipping lines from import and excise duty, value added tax, railway development levy and import declaration fees.<\/p>\n

In Tanzania, the Samia government unveiled a $15.7 billion budget, of which $1.3 billion has been allocated to flagship infrastructure projects in the 2021\/2022 fiscal year. Finance Minister Mwigulu Nchemba allocated funds to the ports of Dar es Salaam, Mtwara, Tanga and Bagamoyo.<\/p>\n

At the Tanga port, the government is investing in dredging from four to 13 metres, installation of navigation equipment and completion of two deep-draft berths.<\/p>\n

To woo users, Tanzania Shipping Agencies Corporation (Tasac) has begun programmes to capture new markets and increase its throughput after heavy investment funded by the World Bank to expand port operations. From March, Tasac started clearing more products, including fertiliser, industrial and domestic sugar, edible or cooking oil, wheat, oil, liquefied petroleum gas and chemicals.<\/p>\n

Dodoma seems to have begun reaping the benefits of the $345 million World Bank grant to the new Dar es Salaam Maritime Gateway Project, which has significantly improved its port business.<\/p>\n

Kenya and Tanzania are competing to position their facilities as the preferred entry points to the region, particularly inland markets in landlocked nations like Uganda, Rwanda, Burundi, South Sudan and the Democratic Republic of Congo.<\/p>\n

Some $58.3 million out of Tanzania\u2019s budget for 2021\/22 has been allocated to implement several marine transport projects in Lakes Victoria and Tanganyika aimed at raising the volume of cargo and passenger movements between Tanzania and neighbouring countries.<\/p>\n

Improve trade<\/b><\/p>\n

According to the Ministry of Works, a new ship with 600-passenger and 400- tonne cargo capacity is being built to ply Lake Tanganyika from Kigoma Port and boost trade with Rwanda, Burundi and the DRC alongside the 100-year-old, 70-metre-long MV Liemba, now undergoing rehabilitation.<\/p>\n

The Tanga port, which will be the exit point for Ugandan petroleum products through the up-and-coming East African Crude Oil Pipeline, is also being dredged from 3.5 metres to 15 metres and raise its cargo handling capacity to over one million tonnes per year.<\/p>\n

Up to 90 percent of Tanzania\u2019s international trade transactions depend on the port of Dar es Salaam. Uganda, Rwanda, Burundi and eastern DR Congo are the target destinations for cargo offloaded at the Dar and Tanga ports while Mtwara port handles cargo for Malawi, Zambia and Zimbabwe.<\/p>\n

Rwanda is the leading EAC partner state using the Port of Dar es Salaam, with about one million tonnes of cargo recorded at the port per year, according to TPA figures. Burundi depends on the port for 99.2 percent of its international cargo while the figure for Rwanda is 86 percent, comprising both imports and exports.<\/p>\n

The $38.72 million MV Mwanza Hapa Kazi Tu construction project is being handled by South Korean firms Gas-Entec and Kangnam and is scheduled for completion by December next year.<\/p>\n

President Samia also inaugurated a $15.53 million slipway at the Mwanza South port that will facilitate further ship construction projects for Lake Victoria. She said the aim was to make Mwanza a major hub of marine business in the Great Lakes region once the SGR project is complete, considering its strategic positioning.<\/p>\n

Tanzania already has two major ships serving all three countries that share Lake Victoria \u2014 MV Victoria with a carrying capacity of 1,200 passengers and 200 tonnes of cargo, and MV Butiama with the capacity to carry 200 passengers and 100 tonnes of cargo.<\/p>\n

*Source: East African<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. The rising political temperatures in Kenya over the Uhuru Kenyatta succession are likely to take a toll on the country\u2019s trade with its East and Central African partners, with importers and transporters on the Northern Corridor already exploring new routes for their cargo. Just this week, Uganda began a trial delivery of […]<\/p>\n","protected":false},"author":84,"featured_media":14177,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[233,240,234],"class_list":["post-14178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nTanzania, Kenya in fight for lucrative Uganda petroleum trade - Uganda<\/title>\n<meta name=\"description\" content=\"The rising political temperatures in Kenya over the Uhuru Kenyatta succession are likely to take a toll on the country\u2019s ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tanzania, Kenya in fight for lucrative Uganda petroleum trade\" \/>\n<meta property=\"og:description\" content=\"The rising political temperatures in Kenya over the Uhuru Kenyatta succession are likely to take a toll on the country\u2019s ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade\" \/>\n<meta property=\"og:site_name\" content=\"Uganda\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2021-07-17T14:27:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2021\/07\/img-60f2e07018184.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"480\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"10 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Tanzania, Kenya in fight for lucrative Uganda petroleum trade\",\"datePublished\":\"2021-07-17T14:27:54+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade\"},\"wordCount\":1926,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/uganda\/sites\/34\/2021\/07\/img-60f2e07018184.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Uganda\",\"uganda\"],\"articleSection\":[\"all news\",\"economy\",\"homepage-english\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade\",\"url\":\"https:\/\/www.africa-press.net\/uganda\/all-news\/tanzania-kenya-in-fight-for-lucrative-uganda-petroleum-trade\",\"name\":\"Tanzania, Kenya in fight for lucrative Uganda petroleum trade - 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