Dangote Tanga refinery will complement Uganda’s refinery

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OPINION

By Jude Kamuganga

Some stories in the media recently attempted to shrink a strategic energy conversation into a narrow frame of rivalry and anxiety, risking distorting public understanding of a vital moment in East Africa’s energy evolution. An oil refinery in Uganda and another in Tanga, Tanzania, are not mutually exclusive.

Energy security is a pressing concern. A country without reliable energy cannot industrialise sufficiently or guard its citizens against economic shocks. President Yoweri Museveni’s resolve to build a refinery must be understood as a strategic and necessary investment. It is about ensuring that Uganda does not remain dependent on imported refined petroleum products with all the vulnerabilities that such dependence comes with.

The war in Iran, which has seen the vital Strait of Hormuz closed, has rocked global energy markets by disrupting supply chains and driving up energy prices, highlighting the dangers of relying heavily on foreign refineries in the Arabian Peninsula. For many countries, the consequences have been immediate, with fuel price spikes and supply gaps.

Heavily reliant on imported refined oil products, East African countries have not been spared. As production and transport costs continue to rise, the burden has been passed on to the ordinary consumer. This is the scenario that Uganda’s refinery project seeks to avoid in the future. For example, if East Africa had adequate refining capacity within its borders, the current crisis would have been far less disruptive. Local refineries would have provided a healthy cushion against the current energy problems.

There was also a misleading assumption that a refinery in Tanga is somehow detrimental to Uganda’s interests. This view treats energy projects as if one can only succeed at the expense of another, which is erroneous. Energy systems can complement each other without creating losers. It is, therefore, both economically sound and strategically wise for East Africa to have multiple refineries.

As East Africa’s cities continue to grow rapidly, while demand for energy rises steadily, a single refinery cannot suffice. The war in Iran has demonstrated how fragile global energy systems can be when they rely on concentrated supply routes and limited refineries. A wider distribution of refineries across the world, including East Africa, would reduce such vulnerability.

East Africa’s economic future is hinged on co-operation rather than competition. Infrastructure projects such as pipelines, storage facilities and refineries are interdependent. For example, Uganda’s refinery does not exist in isolation; it is part of a broader regional ecosystem. So, a refinery in Tanga would complement this system, enabling cross-border trade in crude and refined products, not forgetting the East African Crude Oil Pipeline that stretches from Uganda to Tanzania. Having adequate refining capability in East Africa would give the region much-needed control on pricing, supply and distribution.

Besides, the UAE’s recent departure from the Organisation of the Petroleum Exporting Countries signals a shift towards national energy autonomy, whereby oil-producing nations are increasingly prioritising domestic strategic interests over collective production agreements. This trend reflects a recognition that energy security cannot be outsourced in an unpredictable geopolitical environment. In Uganda’s case, it confirms that investing in domestic refining capacity is not only prudent but necessary because in a world where alliances shift and supply chains are disrupted, self-reliance supported by regional cooperation becomes a dependable foundation of economic stability.

Uganda’s refinery project is also vital for the country’s industrial and agricultural modernisation agenda. Besides producing fuel, refineries create an ecosystem of value addition, petrochemicals, fertilisers, and other downstream industries. These products have the potential to drive agricultural productivity, manufacturing and job creation. A refinery would therefore be a catalyst for economic transformation and the realisation of Uganda’s Vision 2040.

Petroleum geologist Farouk Ali Kassim’s “Ten Oil Commandments” emphasises, among other principles, the importance of value addition at source and meaningful national participation across the petroleum value chain. These principles are a critique of models where resource-rich countries have remained trapped at the lowest level of the value chain, exporting raw commodities while importing finished goods at a higher cost. Kassim encourages deliberate policies that anchor refining and processing within the producing countries themselves, just as Uganda aspires to do.

Therefore, building an oil refinery at Kabaale, Hoima district, is a sovereign decision in line with Uganda’s energy security strategy. Developments in Tanga do not diminish this decision but rather strengthen it. The presence of multiple refineries in East Africa would be a welcome sign of economic maturity, reflecting a region that is beginning to take control of its energy destiny.

Therefore, the Dangote Tanga Refinery is a companion and not a competitor, as ‘The East African’ portrayed it.

The writer is a lawyer, energy economist and climate finance expert. He is the team lead of climate finance and carbon markets at Envirosure