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Vitol unfolding: Navigating the pitfalls of the UNOC oil supply deal

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Uganda is an interesting country and despite having several accountability institutions and agencies, it seems we still carry out business in incongruently, at times to our own detriment.

Take the example of the new oil products supply deal between the government represented by the Uganda National Oil Company (UNOC) and oil brokerage firm Vitol, a development that has seemingly caught government in the wrong lane, of course taking into consideration that the bill can be assented, nonetheless.

That notwithstanding, as the bickering over the whole deal goes on and even hits peak fever, Ugandans are wondering whether the Public Procurement and Disposal Authority (PPDA) is up to its job, or whether it is a lame duck institution waiting to rubber stamp a decision that is seemingly at odds with the procurement processes, never mind that this particular deal is worth millions of dollars, the more reason PPDA must be loud about it!

Actually, the PPDA’s loud silence on a matter that involves the procurement of a service provider of oil products to Uganda without going through the usual procedures that involve advertising through an Open Tender System (OTS), is as disturbing as the Energy Minister’s silence on the matter, save for presenting the highly secretive bill to parliament.

In fact, there is so much bickering behind the walls, but what is being said includes questions about the fate of several industry players like Captain Mike Mukula, whose business and earning is going to be affected by the new oil supply structure. Others, including industry sector players in Kenya are not just complaining but have gone a notch higher and filed a petition in the Kenya High Court, seeking to have their national regulation body deny UNOC an import license.

And here, even the Speaker gets flak on her face.

“When the Speaker presides over debate on such an issue on which the President has commented negatively, she seems to negate the importance of rules and regulations espoused by the several protocols, both regional and international, which the country is bound to respect. And to imagine that she cut short her maternity leave to ostensibly be around to pass the bill is disturbing. In fact, given the passing of the bill in its entirety, is evidence that she had not acclimatized herself with developments coming up, including knowing that some interested parties had gone to court, and that a date to hear and determine the matter had been set for December 6”, an industry source, speaking on condition of anonymity for fear of reprisals said.

He did not spare Minister Nankabirwa either.

“Natural justice demands that Minister Nankabirwa says something about the deal to the many layers of people affected by the new move, giving assurances that all was done transparently and will in the end not benefit a new set of middlemen but the general public, which is as it must.

Indeed, industry players say the issue of oil products supply is not new; there have been structures like the OTC and G2G or G2G, which have existed before which, experts say could have been improved upon in the spirit of the East African Community, instead of trying to derail the applecart.

“Any intended switch to the supply structure should have been preceded by talks on both sides, to see how to resolve the issue of overpricing caused by the layers of middlemen, taking into consideration that the switching will be fair and just, leading to a win-win situation.

” This seems to have been ignored, and the resultant effect is the court matter that seeks to deny UNOC an import license, a development that can destabilise the whole supply chain, if the Kenyan Court grants the orders so sought in the plaint before it”, the industry player says.

The source added: “Because of the high secrecy shrouding the bill before it’s presentation, it seems not enough scrutiny was carried out on some ‘lesser’ details like human rights and freedoms, which are key ingredients of carrying out big business, that are respected in countries that follow the law to the letter and spirit”.

Recently, the Parliament of Uganda passed the Petroleum Supply bill as amended in 2023, causing uproar, with many people citing mischief on the part of its proponents. It is against such a background that vitriolic banter emerged, with claims that millions of dollars exchanged hands to have the bill passed, amid claims of circumventing the laws and procedures so established.

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