A commercial dispute involving an oil supply agreement has been referred to arbitration in London, according to court filings, media reports and legal commentary.
The High Court directed that the matter be resolved by the London Court of International Arbitration (LCIA) in the United Kingdom, in line with an arbitration clause contained in the contract between the parties.
The court also ordered a stay of proceedings in Tanzania, effectively halting the case locally to allow arbitration to proceed, as reported by The Citizen.
The case is part of a broader commercial conflict involving regional fuel supply chains linking Tanzania and Burundi. At the center are trading firms including Numora Trading PTE Limited and Dubai-based Lamar Commodity Trading DMCC, which have previously been involved in litigation over a fuel consignment destined for Burundi.
In earlier proceedings, Tanzania’s Court of Appeal upheld a High Court decision requiring the release of more than 20,000 metric tonnes of gasoline linked to the dispute, after allegations that the cargo had been diverted despite payment being made.
The dispute highlights the complexity of multi-party oil transactions in East Africa, where suppliers, financiers, logistics firms and local distributors often operate across borders under separate contractual arrangements.
Regional fuel trade dynamics
Burundi is heavily dependent on imported petroleum products, most of which transit through Tanzania’s ports and transport corridors before reaching landlocked markets. Disruptions along this corridor—whether commercial, legal or logistical—can quickly affect national supply.
The country has struggled to stabilise its fuel import system in recent years. In 2024, the government created the state-owned Société Pétrolière du Burundi (SOPEBU) to centralise fuel procurement and distribution, amid concerns over mismanagement, foreign currency shortages and fragmented private-sector imports.
Previously, private firms such as Interpetrol Burundi played a major role in supply, but policy shifts and restrictions on foreign exchange access contributed to supply disruptions and market instability.
Burundi’s ongoing fuel crisis
The arbitration case unfolds against the backdrop of a prolonged fuel crisis in Burundi that has significantly affected daily life and economic activity.
The country has faced chronic fuel shortages for several years, driven by limited foreign currency reserves, supply chain disruptions and structural weaknesses in the energy sector.
The shortages have led to long queues at petrol stations, rationing and the emergence of a thriving black market. In some cases, fuel prices on the informal market have risen several times above official rates, while smuggling from neighboring countries has increased.
The crisis has also had broader social and economic consequences. Businesses, transport services and public institutions have been disrupted, with fuel scarcity compounding shortages of electricity and water.
Reports indicate that the situation has persisted for more than three years, with some analysts describing it as one of the most severe economic challenges facing the country in decades.
Analysts say the dispute underscores the vulnerability of landlocked economies like Burundi to disruptions in cross-border energy supply chains, as well as the importance of clear contractual frameworks in international commodity trading.
While arbitration proceedings at the LCIA are confidential, the outcome could have implications for how regional fuel supply agreements are structured and enforced, particularly in high-risk markets where supply constraints and financial pressures are acute
