Uganda's Refinery: Securing Energy 'Food at Home'

The concept of having “food at home” extends beyond meals to the critical realm of energy security for Uganda. Much like relying on external restaurants for every meal can lead to vulnerability, depending solely on imported refined petroleum products exposes the nation to global supply chain disruptions and price volatility.

Uganda’s burgeoning demand for petroleum products, which surpassed 6.5 million liters daily in 2023, is currently met almost entirely through imports. This reliance makes the country susceptible to shipping delays and logistical challenges. A proposed domestic refinery, with a significant daily capacity, would offer a buffer, ensuring more predictable access to fuel and enhancing national energy security.

Economically, establishing a local refinery represents a significant “import substitution” strategy. Petroleum products are among Uganda’s largest imports, costing over $2 billion in 2023. By refining crude oil domestically, a substantial portion of this expenditure could be retained within Uganda, circulating through local businesses, employment, and government revenues, rather than flowing to foreign refiners and suppliers.

Furthermore, Uganda possesses its own crude oil reserves, referred to as its “garden.” Exporting this crude only to import refined products is comparable to harvesting local produce and then paying others to cook and sell it back. A domestic refinery would allow Uganda to capture a significant share of the value added through refining, which currently benefits foreign entities. This retained value can stimulate related industries like petrochemicals and fertilizers, ultimately giving Uganda greater control over its essential energy supply.

Source: https://www.monitor.co.ug/uganda/oped/commentary/a-refinery-is-uganda-s-food-at-home—5493470