Uganda's President Yoweri Museveni recently broke ground on the Kampala Storage Terminal in Mpigi District, a $300 million project that will hold 320 million liters of petrol, diesel, jet fuel, and kerosene. The terminal will more than double Uganda's national storage capacity and is expected to be completed within 24 months. This project is a significant step towards Uganda's ambition to become a regional petroleum hub.
The Kampala Storage Terminal will provide Uganda with over a month of fuel cover, considering the country uses approximately 240 million liters of fuel per month. The terminal is part of a larger plan to build a robust fuel import system, which includes a refinery planned for Hoima, a 211-kilometer products pipeline into the center of the country, and further regional storage. This infrastructure will enable Uganda to manage fuel supply shocks and maintain a stable economy.
The Ugandan government has taken steps to cushion the impact of fuel supply shocks, introducing a fuel import system in 2024 under which the Uganda National Oil Company (UNOC) sources product through Vitol. The International Monetary Fund (IMF) credited this system with helping to mitigate the effects of the Middle East conflict in 2026, which led to increased freight rates and premiums. Uganda's experience during this period demonstrated the importance of strategic fuel storage and diversified supply corridors.
The development of Uganda's fuel infrastructure is closely linked to Tanzania's plans to build an energy hub at Tanga. A memorandum signed this year between Uganda, Tanzania, and Vitol outlines a proposal for a bi-directional products pipeline between Tanga and Uganda, which would enable the movement of refined fuel in either direction as demand requires. This pipeline would be comparable in scale to the 1,443-kilometer East African Crude Oil Pipeline (EACOP) corridor.
The proposed pipeline and energy hub at Tanga would provide landlocked producers with access to the Indian Ocean and create new opportunities for fuel trade between Uganda and Tanzania. Feasibility and engineering studies for the project are expected to be completed this year. When completed, the pipeline and hub will enhance fuel security in East Africa and provide a strategic advantage for the region.
The construction of the Kampala Storage Terminal and the planned energy hub at Tanga demonstrate the commitment of Uganda and Tanzania to building a more secure energy future. According to President Museveni, "We are now moving slowly out of sleep," reflecting the scale of ambition required to manage the next decade of energy shocks. The countries that will be best equipped to handle these shocks are those that invest in building tanks, ports, pipelines, and partnerships before they are forced to.
The development of East Africa's fuel infrastructure is a long-term effort that requires cooperation and investment from governments, private companies, and international partners. With the Kampala Storage Terminal, the planned energy hub at Tanga, and other projects underway, East Africa is taking proactive steps to build a more secure and resilient energy system. This approach will enable the region to manage fuel supply shocks and support economic growth and development.
Key points
- Uganda's new Kampala Storage Terminal will hold 320 million liters of fuel and more than double the country's national storage capacity.
- A proposed bi-directional products pipeline between Tanga and Uganda will enable the movement of refined fuel in either direction as demand requires.
- The development of East Africa's fuel infrastructure is critical to enhancing regional energy security and supporting economic growth and development.
