President Museveni has broken ground for the construction of a 320-million-litre petroleum storage terminal in Mpigi District, a project expected to strengthen Uganda’s fuel reserves and reduce vulnerability to supply disruptions.
The Kampala Storage Terminal, being developed by the Uganda National Oil Company (UNOC), will sit on 300 acres of land and is expected to cost about $250 million (about Shs900 billion).
The President presided over the groundbreaking ceremony on Thursday, describing the facility as an important milestone in strengthening Uganda’s petroleum security and capacity to supply fuel to domestic and regional markets.
The terminal will increase Uganda’s capacity to store refined petroleum products and support the establishment of strategic national fuel reserves.
Uganda currently has an estimated petroleum storage capacity of 160 million litres, comprising a 30-million-litre facility in Jinja, a 70-million-litre facility at Mahathi in Kawuku and about 60 million litres operated by private fuel companies.
President Museveni said adequate storage infrastructure is critical as Uganda develops its petroleum sector.
“When we took over government in 1986, we tried to hand over the administration of government to the learned technocrats in the ministries. Now, in the Ministry of Energy, with Permanent Secretaries and Commissioners, it took a Senator in Kenya to bring a serious matter to my attention that Uganda was buying petroleum products through middlemen in Kenya,” he said.
The President said government later introduced measures that helped reduce the cost of petroleum products, citing reductions in the cost of diesel from $118 to $83 per metric tonne, petrol from $97.5 to $61.5 and aviation fuel from $114.25 to $79.25.
“Now that we are moving well on developing our resources, we must plan for storage,” he said, adding that the new terminal would improve the reliability and efficiency of fuel supply.
However, President Museveni cautioned that the facility should not be considered the final solution to Uganda’s storage needs, saying the country must continue planning for larger facilities to meet its long-term petroleum requirements.
He also commended Vitol Bahrain for supporting Uganda’s fuel supply chain, including supplying petroleum products on credit, with government making payments when funds become available.
The President said Uganda would participate in the development of a larger refinery in Tanga, Tanzania, as part of regional efforts to strengthen petroleum security.
Works to start
UNOC board chairman Mathias Katamba said the terminal would help position Uganda as a regional hub for petroleum products.
He said the company had secured the required government and building permits from relevant local authorities, as well as a petroleum facility construction permit from the Ministry of Energy and Mineral Development.
According to Mr Katamba, the engineering, procurement and construction contract takes effect on September 18, with site works expected to start immediately after the groundbreaking.
Detailed engineering is expected to be completed by March 2027, while commissioning of the terminal is scheduled within 24 months of the contract effective date, around September 2028.
Energy and Mineral Development Minister Monica Musenero said the facility would serve as a strategic storage hub and play a critical role in strengthening Uganda’s petroleum supply chain.
She pledged ministry support for the project but called for improved road connectivity to the terminal, particularly the link to the Mpigi Expressway.
Dr Musenero also called for railway connectivity to facilitate the transportation of petroleum products.
The ministry’s Permanent Secretary, Irene Batebe, said the terminal would strengthen Uganda’s ability to maintain strategic petroleum stocks and respond to possible disruptions in fuel supply.
The facility is expected to enhance Uganda’s ability to maintain strategic reserves, reduce vulnerability to supply disruptions and improve the distribution of refined petroleum products to domestic and regional markets.
