Kenya has moved to counter Tanzania’s oil trade ambitions by seeking deals with Rwanda, the Democratic Republic of Congo (DRC) and South Sudan.
Reports indicate that Kenya is already on the verge of securing a deal with Rwanda through Kenya Pipeline Company (KPC).
The deal which is expected to be signed within 90 days will see Paul Kagame’s administration import oil through the Port of Mombasa instead of the Dar es Salaam Port in Tanzania.
This presents a significant blow to Tanzania considering plans to use its ports to transport oil to Rwanda have been on the pipeline since 2021.
Apart from the Kigali deal, already, a delegation from KPC is in DRC trying to secure a similar agreement. Kenya has already ramped up investment in advanced infrastructure to ensure South Sudan relies on the Port of Mombasa for its oil needs.
“We are now fine-tuning the last steps of the process and, therefore, with Rwanda coming on board, we have a larger market to serve and even generate more revenues,” Joe Sang, the CEO of the Kenya Pipeline Company was quoted by The Africa Report as saying.
This deal is expected to be a foreign exchange bonanza for Kenya considering that currently Rwanda only imports 3 per cent of its oil through Kenya.
Rwanda, DRC and South Sudan's agreements with Kenya come at an opportune time as Uganda has tentatively agreed to continue importing Ksh264 billion worth of fuel annually through Kenya.
Uganda had in the past threatened to ditch Kenya and use the Tanzania route citing exploitation by Kenyan-based Oil Marketing Companies (OMCs).
Uganda is also expected to benefit from the Kenya-Rwanda deal as the fuel will pass through its territory and be subjected to standard levies.
KPC will pump the Rwanda-bound fuel to Eldoret where it will be picked up by trucks and transported to Kigali through Uganda.
Sang is optimistic that Kenya will increase oil export volumes not only to Rwanda but also to Burundi and South Sudan.
As it is with Rwanda's case, South Sudan will receive its refined fuel through Uganda after picking it up at the Eldoret KPC depot.
