Uganda's President Museveni recently broke ground on a $300 million fuel storage terminal in Mpigi, a project that will significantly boost the country's fuel storage capacity. The Kampala Storage Terminal will hold 320 million liters of petrol, diesel, jet fuel, and kerosene, more than doubling Uganda's national storage capacity. The terminal is expected to be completed within 24 months and will provide the country with over a month's worth of fuel cover, considering Uganda's monthly consumption of approximately 240 million liters.
The new terminal is a crucial step towards Uganda's ambition to become a regional petroleum hub. According to President Museveni, the country needs to be prepared for potential disruptions in fuel supply, such as those caused by conflicts in the Middle East, which led to increased freight rates and premiums in 2026. Uganda's fuel import system, introduced in 2024, has helped cushion the shock, with the IMF crediting it for containing domestic pump price movements. The Mpigi facility is part of a larger plan, which includes a refinery planned for Hoima, a 211-kilometer products pipeline into the center of the country, and further regional storage.
The development in Uganda is linked to a broader regional initiative, with Tanzania set to play a key role. A memorandum signed this year between Uganda, Tanzania, and Vitol outlines plans for an energy hub at Tanga, which will be connected to Uganda through a proposed bidirectional products pipeline. The pipeline, comparable in scale to the 1,443-kilometer East African Crude Oil Pipeline, will enable the movement of refined fuel in either direction, depending on demand. Feasibility and engineering studies for the pipeline are due to be completed this year.
The strategic importance of the fuel storage terminal and the planned energy hub cannot be overstated. As President Museveni noted, a blocked port, railway failure, or war far away can put an entire economy under pressure within two weeks. The past two years have made this risk impossible to ignore, with countries that built strategic stocks, locked in supply contracts, and kept multiple corridors open managing better. The IMF's assessment credited Uganda's fuel import system with helping to mitigate the impact of the crisis.
Uganda is also on the cusp of becoming an oil-producing country, with the crude oil, now called Pearl Sweet, set to flow through the East African Crude Oil Pipeline to Tanga. The infrastructure being built will enable Uganda to receive, refine, store, and move fuel, regardless of the global situation. The regional approach to fuel security is reflected in the cooperation between Uganda, Tanzania, and Vitol, which aims to create a more secure future for East Africa.
The energy hub at Tanga will not only serve Uganda but also provide a vital link for landlocked producers to the Indian Ocean. The proposed bidirectional products pipeline will enable the movement of refined fuel between Tanga and Uganda, as well as potentially onwards. This development has the potential to strengthen fuel security in East Africa, with a terminal in Mpigi being more valuable when connected to a wider system of pipelines and ports.
As East Africa continues to build its fuel infrastructure, the region is demonstrating its commitment to being better prepared for future energy shocks. With the construction of the Mpigi terminal, plans for the Tanga energy hub, and the development of a refinery in Hoima, the region is taking a proactive approach to fuel security. According to a Kampala-based social commentator and Global Affairs analyst, the countries that will manage the next decade of energy shocks are those building tanks, ports, pipelines, and partnerships before they are forced to.
Key points
- The new fuel storage terminal in Mpigi will more than double Uganda's national storage capacity.
- A proposed bidirectional products pipeline between Tanga and Uganda will enable the movement of refined fuel in either direction.
- The regional approach to fuel security in East Africa is reflected in the cooperation between Uganda, Tanzania, and Vitol.
