Uganda unveils big plan to prevent future fuel crises

KAMPALA - Uganda’s latest fuel price shock has exposed an uncomfortable reality: a country that imports all its refined petroleum products remains vulnerable to events happening thousands of kilometres away.

A conflict in the Middle East can push up transport fares in Kampala. Disruptions in global shipping routes can affect traders in Gulu or farmers in Masaka.

The government now says it wants to reduce that vulnerability through a long-term strategy focused on fuel storage, alternative supply routes, and, eventually, refining Uganda’s own petroleum.

Speaking at the Uganda Media Centre on May 22, Permanent Secretary in the Ministry of Energy and Mineral Development, Irene Pauline Bateebe, outlined what officials describe as a broader national plan to strengthen Uganda’s energy security.

At the centre of that strategy is storage. Uganda is expanding its fuel reserve infrastructure to ensure the country can withstand temporary regional or international supply disruptions without sliding into shortages.

One of the key projects is the refurbishment of the Jinja Storage Terminal, one of Uganda’s main strategic fuel reserve facilities. Its current storage capacity of about 30 million litres is expected to increase to 40 million litres after upgrades.

Larger reserves allow government and fuel suppliers to keep the country running longer during supply interruptions, price spikes, or transport delays.

The government has also partnered with Lake Victoria Logistics, also known as Mahathi Infra Terminal, to improve fuel transportation and diversify supply routes into Uganda and the wider region. The facility has a storage capacity of 70 million litres.

Officials say this reduces dependence on a single transport corridor and strengthens resilience during emergencies.

The most ambitious project lies in Mpigi District, where the government is developing the Kampala Storage Terminal and refined products reservoir at Namwabula, as part of the Uganda Refinery Project.

The planned facility will have the capacity to store 320 million litres of fuel. That project is tied directly to Uganda’s long-awaited refinery ambitions.

The proposed refinery in Hoima, valued at about $4 billion, is designed to process 60,000 barrels of crude oil per day once operational. The logic behind the refinery is strategic as much as economic.

Currently, Uganda exports crude potential, but imports refined products like petrol and diesel.

Refining locally could reduce exposure to international supply shocks and global price volatility while supporting local industries linked to petrochemicals, fertilisers, gas production, and manufacturing.

“The refinery is expected to substantially strengthen Uganda’s strategic fuel reserves, stabilise long-term supply, support regional exports, and reduce the country’s exposure to global supply shocks and international price volatility,” Bateebe said.

The refinery project also includes a 211-kilometre multi-products pipeline connecting Hoima to the storage hub in Mpigi.

At the same time, the government is looking beyond existing oil discoveries. Officials confirmed that Uganda plans to launch its Third Petroleum Exploration Licensing Round during the 2026/2027 financial year, offering new exploration blocks in the Albertine Graben and frontier basins.

Uganda National Oil Company has also begun additional seismic surveys in the Kasurubani area to identify new petroleum prospects.

These efforts, the government says, are part of a wider plan to secure future petroleum reserves and maintain long-term energy stability.

Beyond infrastructure, there are also policy changes underway. Government recently finalised the National Petroleum Policy 2025, replacing the 2008 policy framework.

According to officials, the updated policy reflects changes in commercialisation, technology, regional integration, environmental sustainability, and the global energy transition.

New Liquefied Petroleum Gas regulations are also expected to be gazetted soon to improve safety, quality control, and regulation across Uganda’s growing cooking gas sector.