Uganda should be firm on crude oil
Jun 18, 2008
President Yoweri Museveni has said Uganda will not export crude oil but have it refined to maximise returns from its exploration. The President is right because for many years, the developed world have been the real beneficiaries of raw materials from poor countries.
President Yoweri Museveni has said Uganda will not export crude oil but have it refined to maximise returns from its exploration. The President is right because for many years, the developed world have been the real beneficiaries of raw materials from poor countries. Museveni has always argued and rightly so that the developing world was the real donor to the West because of the many benefits that accrue from our exported raw materials.
Crude oil, like other raw minerals or unprocessed agricultural products, is of limited use yet over 4,000 by-products could be derived from it when refined. Uganda’s estimated total import bill for petroleum products for the year 2007/08, excluding freight and taxes, is estimated at $3,391.9m up from $2,513.6m the previous year, representing an increase of 35%. This forex would be saved if our crude oil is refined here.
Besides getting petrol, other useful by-products of oil would be derived like liquefied petroleum gas (LPG), naphtha, kerosene and fuel oils. Other products that would be lost through crude oil export would include lubricants and asphalt which, used for tarmacking roads. A range of sub-products like perfumes and insecticides would also be lost.
The resultant industries to consume crude oil by-products would create millions of jobs for the unemployed Ugandans.
Oil by-products like naphtha, LPG and ethane are themselves raw materials for the production of petrochemicals. In all, there are over 4,000 different petrochemical products, but those considered basic include plastics, synthetic fibres, synthetic rubbers, detergents and chemical fertilisers.
If Uganda has sufficient oil reserves, then the President’s position should be supported. We should get the best bargain, a refinery. There is absolutely no reason why we should be at the bottom of the value chain in oil production and the earlier we take a firm stand, the better.
Crude oil, like other raw minerals or unprocessed agricultural products, is of limited use yet over 4,000 by-products could be derived from it when refined. Uganda’s estimated total import bill for petroleum products for the year 2007/08, excluding freight and taxes, is estimated at $3,391.9m up from $2,513.6m the previous year, representing an increase of 35%. This forex would be saved if our crude oil is refined here.
Besides getting petrol, other useful by-products of oil would be derived like liquefied petroleum gas (LPG), naphtha, kerosene and fuel oils. Other products that would be lost through crude oil export would include lubricants and asphalt which, used for tarmacking roads. A range of sub-products like perfumes and insecticides would also be lost.
The resultant industries to consume crude oil by-products would create millions of jobs for the unemployed Ugandans.
Oil by-products like naphtha, LPG and ethane are themselves raw materials for the production of petrochemicals. In all, there are over 4,000 different petrochemical products, but those considered basic include plastics, synthetic fibres, synthetic rubbers, detergents and chemical fertilisers.
If Uganda has sufficient oil reserves, then the President’s position should be supported. We should get the best bargain, a refinery. There is absolutely no reason why we should be at the bottom of the value chain in oil production and the earlier we take a firm stand, the better.