HABARI DAILY I Kampala, Uganda I The Uganda National Oil Company (UNOC) will be the custodian of the Shs32 billion dividend expected from Uganda’s 20.15% stake in Kenya Pipeline Company (KPC), with the proceeds set to be retained by the state-owned petroleum firm to support its operations and investments in critical oil infrastructure.
The anticipated earnings follow KPC’s October 14, 2026 financial results, which showed a 13.1% increase in net profit to KSh11.58 billion for the financial year ended June 2026, prompting its board to propose a total dividend payout of KSh5.9 billion to shareholders.
Uganda’s share of the proposed distribution amounts to approximately KSh1.19 billion, equivalent to about Shs32 billion, although some estimates place the value at Shs33.3 billion depending on the exchange rate applied.
UNOC acquired the 20.15% stake during KPC’s privatisation and listing on the Nairobi Securities Exchange in March 2026, giving Uganda a direct financial interest in the company responsible for transporting substantial volumes of petroleum products across Kenya and to neighbouring countries.
The dividend remains subject to shareholder approval and the applicable eligibility requirements. The proceeds are expected to be paid after the shareholder register closes on November 30, 2026.
Dividend to Finance UNOC Operations
Unlike tax revenue and other government receipts that are channelled through the national budget, the dividend will accrue directly to UNOC as the holder of Uganda’s shares in KPC.
The proceeds are expected to remain within the company to finance operational requirements, strengthen its financial position and support investments in petroleum infrastructure.
One of the projects that could benefit from UNOC’s growing financial capacity is the planned Kampala Storage Terminal in Mpigi, which is designed to accommodate 320 million litres of petroleum products.
The facility is expected to strengthen Uganda’s fuel storage capacity, improve supply security and reduce the country’s vulnerability to disruptions in petroleum transportation and distribution.
Retaining the dividend could also provide UNOC with additional financial resources as it expands its involvement in petroleum imports, storage and distribution.
The company recently reported gross margins of Shs540 billion from fuel imports in the 2025/26 financial year, up from Shs387 billion in the previous year.
The dividend from KPC would therefore provide another potential source of income, complementing earnings from UNOC’s petroleum trading operations.
However, the proceeds should not automatically be interpreted as money that will directly reduce pump prices. Any effect on retail fuel costs would depend on how the funds are invested, alongside international oil prices, exchange rates, transportation charges and other market factors.
KPC Profits Rise, Revenue Expands
KPC’s improved financial performance provides the foundation for the proposed dividend distribution.
The company recorded a net profit of KSh11.58 billion, compared with KSh10.2 billion in the previous financial year. Revenue increased by 9% to KSh43 billion from KSh39.5 billion, supported by a 7% rise in petroleum volumes transported within Kenya and to neighbouring markets.
KPC Acting Managing Director Pius Mwendwa said the company had delivered growth despite challenging international market conditions.
“Despite a difficult operating environment characterised by global petroleum prices and supply volatility due to the Middle East crisis, KPC Plc has managed to grow its top line and bottom line while improving operating cost efficiencies,” Mwendwa said.
The board proposed a dividend of KSh0.32 per share, equivalent to approximately Shs9, resulting in a total payout of KSh5.9 billion.
The company also reported stronger cash generation, with cash generated from operating activities rising by 34% to KSh17.4 billion from KSh12.94 billion.
Shareholders’ equity increased by 11% to KSh119.3 billion, while borrowings declined by 83.4% to KSh442.86 million.
KPC is targeting annual revenue of KSh68 billion by 2030, compared with KSh43 billion in the latest financial year.
Uganda Eyes Bigger Benefits
Beyond dividend income, Uganda’s investment is expected to deliver strategic benefits through its participation in KPC’s governance and potential regional infrastructure developments.
The investment secured Uganda two seats on KPC’s board, occupied by Treasury Permanent Secretary Ramathan Ggoobi and Energy Ministry Permanent Secretary Irene Bateebe.
Uganda could also benefit from the proposed extension of KPC’s petroleum pipeline from Eldoret to Kampala, which could reduce reliance on road tankers and improve the efficiency of fuel transportation.
The project would complement the planned Kampala Storage Terminal, potentially integrating cross-border pipeline transportation with expanded domestic storage capacity.
KPC Board Chairperson Faith Bett-Boinett said the company was exploring opportunities beyond conventional pipeline transportation, including storage, re-export, liquefied petroleum gas, liquefied natural gas, biofuels and power generation.
She said KPC’s assets were well positioned to strengthen energy security, meet growing regional demand and generate additional revenue.
The company has also identified a proposed petroleum trading hub at the Kipevu complex in Mombasa as a potential growth opportunity.
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