Uganda has decided to end the lucrative oil trade as Kenya renews its trade pact with its Tanzanian neighbors.

Last week, the Uganda Railways Corporation began a test delivery of 500,000 liters of petroleum products through Lake Victoria, resuming shipments after a 16-year break with Tanzania.

The move jeopardizes business with the port of Mombasa, as Uganda accounts for about three quarters of the cargo in transit from the port of Mombasa.

The port of Mombasa.

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The decision to end business with Kenya risks further damaging the port of Mombasa which is currently struggling and faces intense competition from the Tanzanian ocean ports of Dar es Salaam and Tanga.

Uganda, which is a landlocked country, consumes around 185 million liters of petroleum products per month.

Most of the fuel consumed in Uganda is trucked through Kenya via the port of Mombasa which is the main distributor according to John Friday, the deputy commissioner for petroleum supplies.

The Port of Mombasa serves South Sudan, the Democratic Republic of the Congo, Rwanda and parts of Tanzania.

It comes just months after the two countries struck a deal to resolve the lingering trade dispute between them following a seven-day visit by Nairobi officials to Kampala.

Led by Cabinet Secretary for Trade and Industry Betty Maina, Kenyan officials visited Uganda on April 11 to discuss non-tariff barriers (NTBs) affecting trade between the two countries and to check on the Ugandan sugar industry. to ensure that exports of the product to Kenya are produced entirely in Uganda.

In response to the concession, Uganda pledged to abolish the 13% excise duty on juices, malt beers and spirits made in Kenya from July 1 and to remove the 12% verification fee. % on pharmaceutical products made in Kenya.

A ship moored at the port of Mombasa.

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