Government sued over oil importation deal

Lawyer Hassan Male Mabirizi has filed a lawsuit against the Government of Uganda for attempting to monopolise petroleum imports into the nation.

Mabirizi argues that the Government’s decision to hire Vitol Company as its exclusive fuel importer without holding a formal bidding process amounts to corruption and unfairly disqualifies suppliers who have the potential to do so. The action was brought before the Anti-Corruption Court.

“The government of Uganda announced that it has created a fuel import monopoly through a contract with Vitol Company. The said company did not go through the normal bidding process under the laws of Uganda, hence corruption,” Mabirizi argued in his court documents filed on November 10.

Mabirizi asserts that importation rights were violated by the conception, processing, selection, contracting, and granting of a gasoline import monopoly to Vitol Company.

He said that “establishing a monopoly in fuel importation derogates the economic rights of other Ugandans who may have the capacity to import fuel.”

Ruth Nankbirwa, the minister of energy, introduced an amendment bill to control petroleum product imports before Parliament on November 1.

In its current form, the Petroleum Supply (Amendment) Bill, 2023 would provide the Uganda National Oil Company (UNOC) the exclusive right to import petroleum products and resell them to regional suppliers.

The proposed law intends to grant UNOC exclusive importing rights, a monopoly that will be transferred to Vitol, a company located in the Bahrain EC, for a period of five years.

The line minister clarified that several agencies are currently involved in the oil supply chain, which is the cause of supply disruptions and rising fuel costs, with a litre of gasoline currently costing around sh7,000 at the pump.

The Government also justified Vitol Company’s exclusivity due to their capacity to supply the funding needed to buy the refineries.

Concerned fuel suppliers argued that adding additional participants would result in lower fuel pump prices last week when they testified before Parliament against the government’s attempt to ring fence UNOC’s petroleum imports through Vitol.

In his lawsuit, Mabirizi requests that the Government or any other state entity be barred from executing the gasoline import monopoly deal that Vitol was awarded.

In addition, he requests that the court issue an order ending Vitol Company’s fuel import monopoly.

According to Mabirizi, allowing this application is “fair, equitable, and in the interest of protecting fundamental and other human rights as well as the rule of law in Uganda.”

The Attorney General is the only respondent in this matter, and as of last Friday at press time, the court had not yet called him to present his defence before setting a date for a hearing.