Section 5: Transportation tariff

(1) The tariff to be charged by the project company for the provision of transport and related services in relation to the EACOP system shall be, in relation to petroleum produced at the existing Uganda oil fields- (a) up to the date when the sum of the production of crude oil from the existing Uganda oil fields as measured at the fiscal meters at Kabaale in Uganda plus the metered volume of the other petroleum transported through the EACOP system in relation to which the tariff charged by and paid to the project company is equal to the tariff for petroleum produced at the existing Uganda oil fields reaches one billion and forty six million (1,046,000,000) barrels, an amount equal to twelve United States Dollars and seventy seven cents (US$12.77) per barrel and adjusted each year starting from the first anniversary of the date of the first commercial delivery of petroleum at the exit point of the EACOP system at an annual increase of the lower of- (i) the US consumer price index; and (ii) two percent (2%) per annum, the details of which shall be more fully set out in agreements for the transport of petroleum; and (b) thereafter, an amount established in accordance with the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013. (2) Notwithstanding section 35 (b), (c) and (d) of the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, 2013, the tariff determined in accordance with subsection (1) (a) shall not be subject to further approval by any State authority. (3) Subsection (2) is without prejudice to the requirement for the Authority to confirm the adjusted tariff determined in accordance with subsection (1)(a), pursuant to the Host Government Agreement. (4) The project company shall notify the Authority of the amount of the adjusted tariff and provide the supporting information and calculation for the adjusted tariff and the Authority shall confirm, within ten business days, that the adjusted tariff is in compliance with subsection (1)(a). (5) For the avoidance of doubt, the computation of the tariff under subsection (1) (b) shall not include the initial capital and operating expenditure covered under the fixed tariff regime prescribed in subsection (1) (a). (6) The tariff for all other petroleum shall be an amount determined in accordance with this Act and the Host Government Agreement.