Media Wire Express Correspondent
Uganda has taken a significant step in its oil and gas sector by finalizing an agreement to develop an oil refinery in Kabaale, Hoima District.
The project, expected to have a capacity of 60,000 barrels per day, is set to enhance the region’s energy security and boost economic cooperation among East African nations.
The deal was officially announced by President Yoweri Museveni, highlighting Uganda’s commitment to refining its crude oil domestically. The move is expected to benefit not only Uganda but also neighboring Tanzania and other East African Community (EAC) member states.
This development comes as Uganda and Tanzania continue their collaboration on the East African Crude Oil Pipeline (EACOP) project. The pipeline, stretching 1,443 kilometers from Hoima to Tanzania’s port city of Tanga, is designed to transport crude oil for export. Notably, about 80 percent of the pipeline runs through Tanzanian territory.
Tanzanian officials have expressed optimism about Uganda’s new refinery, seeing it as an opportunity for regional energy trade. Dr. James Mataragio, Tanzania’s Deputy Permanent Secretary in the Ministry of Energy, noted that if Uganda produces more refined petroleum products than it needs, Tanzania could be among the countries benefiting from the surplus.
“Depending on their output, Uganda may choose to sell surplus refined oil to regional markets, including Tanzania,” Dr. Mataragio explained.
The EACOP project is already transforming local economies. As of late 2024, the project had provided nearly 9,000 temporary jobs in Tanzania alone, with more employment opportunities expected as work progresses. Additionally, compensation for affected residents has exceeded Sh35 billion, ensuring that local communities benefit from the project.
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Despite the promising outlook, the pipeline and refinery projects have faced criticism. Environmental activists have raised concerns about potential ecological damage and displacement of communities along the pipeline’s route. Some protests have been met with government restrictions, sparking debate over balancing economic development with environmental conservation.
Nonetheless, Uganda and Tanzania remain committed to seeing the projects through, viewing them as key drivers of economic growth and regional cooperation. With construction ongoing and production expected in the coming years, the two nations are poised to become major players in Africa’s oil industry.
The refinery, once operational, could reduce Uganda’s reliance on imported petroleum products and position the country as a supplier of refined fuel to the region. For Tanzania, this could mean a more reliable and cost-effective energy source, further strengthening economic ties between the two neighbors.
