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Uganda’s Fuel Strategy Shift: Pipeline Plans with Tanzania

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Museveni, Suluhu discuss oil
PHOTO — PPU


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Uganda is actively pursuing a partnership with Tanzania to construct a pipeline that would transport fuel from Tanga to Mpigi, a district neighboring the capital city of Kampala. This proposal, welcomed by private importers of petroleum products, aims to enhance supply stability and potentially reduce costs for consumers within Uganda.

The initiative comes amidst uncertainties surrounding the utilization of Kenya’s Mombasa-Kisumu pipeline, following changes in import policies implemented by the Kenyan government last year. These policy shifts have disrupted Uganda’s traditional fuel importation routes and prompted exploration of alternative solutions to ensure consistent and reliable supply chains.

Anthony Ogalo, the Chairperson of the Sustainable Energies and Petroleum Association (Sepa), highlighted the potential benefits of the proposed pipeline, noting that while the distance from Tanga to Kampala is greater than that from Mombasa to Kampala, direct pipeline transport from Tanga would eliminate the need for fuel trucks to cover additional distances. This streamlined approach could result in cost savings and improved logistical efficiency for fuel transportation.

Energy Minister Ruth Nankabirwa reiterated the government’s commitment to the Tanga-Mpigi pipeline project, emphasizing its strategic importance in ensuring supply security and diversifying import routes. The proposed Mpigi terminal, with a projected capacity of 320 million liters of fuel, is poised to complement existing storage facilities in Jinja, further enhancing Uganda’s fuel storage and distribution capabilities.

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However, concerns have been raised regarding the viability of the pipeline project, particularly in terms of operating below capacity given Uganda’s current fuel consumption levels. To address this challenge, stakeholders have emphasized the potential for the pipeline to serve neighboring countries such as South Sudan, Rwanda, the Democratic Republic of Congo, and Burundi, thereby bolstering its economic feasibility and sustainability.

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Collaborative efforts between Uganda and Tanzania are underway, with technical teams from both countries engaged in discussions to facilitate the project’s advancement. Negotiations include considerations for tax waivers and infrastructure enhancements to optimize the pipeline’s operational efficiency and maximize fuel volumes transported through the Tanzanian route.

The decision to explore alternative fuel importation routes follows a protracted dispute between Uganda and Kenya, stemming from Kenya’s Energy and Petroleum Regulatory Authority’s (Epra) refusal to grant an import license to the Uganda National Oil Company (Unoc) for use of the Mombasa-Kisumu pipeline. This dispute, compounded by legal challenges and regulatory hurdles, has prompted Uganda to seek alternative solutions to ensure fuel supply stability and security.

While efforts to resolve the dispute with Kenya continue, Uganda remains committed to diversifying its fuel importation strategies and strengthening regional partnerships to mitigate supply chain disruptions and enhance energy security.

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