Museveni: Jirongo Tip Exposed Uganda Fuel Middlemen, Cut Costs

• President Museveni revealed that late Kenyan politician Cyrus Jirongo alerted him in 2019 to Uganda's reliance on Kenyan middlemen for petroleum procurement.
• Uganda's procurement system was reformed in 2023 through a direct deal with Vitol, resulting in significant price reductions for diesel, petrol, and aviation fuel.
• The new arrangement was supported by the Kenyan government, which allowed Uganda to use its oil pipeline and acquire a 20.15% shareholding.
• Uganda is strengthening its energy security by developing the 320-million-litre Kampala Storage Terminal in Mpigi, managed by UNOC.
• These changes represent a strategic shift towards direct sourcing and national storage, impacting existing contracts and compliance for energy sector stakeholders.

The shift in Uganda's petroleum procurement strategy, prioritizing direct sourcing and national storage, carries significant implications for legal and commercial stakeholders.

Ugandan President Yoweri Museveni recently disclosed that the late Kenyan politician Cyrus Jirongo was instrumental in alerting him to the country's long-standing practice of acquiring petroleum products through intermediaries in Kenya. This crucial information was reportedly conveyed to President Museveni around 2019, prompting him to instruct the then Minister of Energy, Irene Muloni, to investigate and rectify the procurement system.

For many years, Uganda had been purchasing its fuel supplies via these Kenyan middlemen, a practice President Museveni stated occurred without his prior knowledge. Despite the initial directive in 2019, immediate changes to the procurement framework did not materialize. Jirongo, identified as a former Lugari Member of Parliament and a Cabinet minister under former President Daniel arap Moi, passed away in December 2025.

President Museveni's revelation was made in a statement following his participation in the foundation stone laying ceremony for the new 320-million-litre Kampala Storage Terminal in Mpigi District. This disclosure underscores a significant shift in Uganda's approach to its national fuel supply chain, moving away from historical reliance on third-party facilitators.

A substantial overhaul of Uganda's petroleum procurement strategy finally took shape in 2023. This involved establishing a direct arrangement with Vitol, a global entity known for its refineries and bulk supply capabilities. The agreement with Vitol, formalized on August 18, 2023, has reportedly led to considerable reductions in the cost of petroleum products for Uganda.

Specific figures cited by the President indicate a drop in diesel prices from US$118 to US$83 per metric tonne, while petrol costs decreased from US$97.50 to US$61.50. Aviation fuel also saw a significant price reduction, falling from US$114.25 to US$79.25 per metric tonne. This new procurement model, often referred to as the Museveni Vitol fuel deal, was facilitated in part by cooperation from the Kenyan government.

President Museveni specifically acknowledged Kenyan President Ruto's role in overcoming resistance from certain actors within Kenya. Furthermore, Kenya granted Uganda permission to transport its petroleum products through the Kenya oil pipeline, and Uganda subsequently acquired a 20.15% shareholding in the pipeline. This strategic move strengthens Uganda's control over its fuel logistics.

These Uganda petroleum procurement changes are part of a broader national effort to enhance the country's energy security and expand its domestic storage capacity. The Kampala Storage Terminal in Mpigi, currently under development by the Uganda National Oil Company (UNOC), is a cornerstone of this strategy. Designed to hold 320 million litres of petroleum products, the facility aims to bolster Uganda's strategic fuel reserves.

By increasing national storage capabilities, Uganda seeks to mitigate vulnerabilities to supply disruptions that have historically impacted the landlocked nation. Historically, Uganda has depended heavily on Kenya as the primary conduit for imported petroleum, with most fuel entering through the Port of Mombasa and then transported inland via the Kenya Pipeline system. Prior to the 2023 reforms, Ugandan oil marketers predominantly sourced their fuel through companies and traders operating within Kenya, a system President Museveni argued inflated costs.

The shift in Uganda's petroleum procurement strategy, prioritizing direct sourcing and national storage, carries significant implications for legal and commercial stakeholders. Lawyers advising clients in Uganda's energy sector or those involved in cross-border trade with Kenya should closely monitor these Uganda fuel supply chain reforms. The move away from intermediaries and towards direct government-to-government or government-to-major-supplier deals could fundamentally alter existing supply contracts and tender processes.

Companies operating within this evolving framework will need to assess compliance requirements under the new direct procurement model. The acquisition of a Kenya Uganda oil pipeline shareholding and the development of the Kampala Storage Terminal Uganda signal a long-term commitment to national control over the fuel supply chain. This strategic reorientation demands careful consideration from all parties involved in the region's energy trade.

Lawyers advising clients in Uganda's energy sector or involved in cross-border trade with Kenya should note the shift in Uganda's petroleum procurement strategy, which prioritizes direct sourcing and national storage. This change could impact existing supply contracts, tender processes, and compliance requirements for companies operating within the new framework.

Source: Original reporting via Nile Post