UNOC’s Sole Importation of Petroleum Products Brings Stability and Growth to Uganda
By Sarah Birungi Banage
In a landmark move in 2024, the Uganda National Oil Company (UNOC) assumed the role of the sole importer of petroleum products for the Ugandan market. This shift has already had significant short-term outcomes and is expected to transform the country's economic landscape in the long run as highlighted below.
Enhanced Security of Supply and Price Stability
The past six months have witnessed a consistent and reliable supply of petroleum products in Uganda with over one (1) billion litres of products imported. UNOC’s direct importation role has minimized the risks of shortages and price volatility, ensuring a steady flow of fuel into the country. Consumers have benefited from stable pump prices, allowing businesses and individuals to plan their expenses more effectively. A quick scan through the last months of 2024, and early 2025 i.e. (Oct – Jan) shows fuel prices averaged at UGX 4,434, and 4,932 for diesel and petrol respectively in October 2024; and had by January 2025 averaged at 4,857, and 4608 for diesel and petrol respectively. These prices show a gradual easing in fuel costs unlike prices witnessed at the start of 2024. (UNOC price analysis across different regions)
Additionally, the elimination of middlemen in the supply chain has enhanced Uganda’s security of supply which in turn has reduced price volatility. Moreover, the direct payment of Forex to Ugandan banks in the purchase of petroleum products from UNOC instead of Kenyan financial institutions by Ugandan oil marketing companies has also strengthened the domestic banking sector, improving the national economy.
Competitive Pump Prices and Economic Growth
From the onset, UNOC partnered with Vitol Bahrain who can source petroleum products from refineries with competitive pricing worldwide. This has presented an added advantage to UNOC because product is secured at better pricing for the country. Over the past six months, Uganda has recorded lower and more stable fuel prices compared to her neighbouring countries, creating added advantage to consumers.
This price stability has attracted more oil marketing companies into the Ugandan market, further enhancing economic activity. The certainty in supply and pricing has additionally provided a much-needed boost to businesses reliant on fuel, especially given the equal opportunities treatment given to traders by UNOC unlike in the past with the existence of middlemen.
Eliminating Tax Evasion and Enhancing Market Integrity
Prior to UNOC’s sole importation role, Uganda faced challenges with fuel destined for its market being diverted to neighbouring countries, leading loss of potential tax revenue and supply inconsistencies. UNOC’s involvement has ensured that all imported fuel reaches the domestic market as intended. Strict manifest documentation measures now prevent alterations to shipment destinations, reducing the loss of tax revenues and improving overall market integrity. A quick look at the January 2024 tax revenues for diesel imports shows that UGX 128,967,705,862 was collected, and this figure went up to UGX 129,623,329,830 in January 2025 for diesel imports. Likewise, petrol imports for January 2024 recorded tax revenues amounting to UGX 178,471,308,640 and a notable increase in tax revenues amounting to UGX 181,735,274, 200 for the same period January 2025. (Stats provided by URA)
Long-Term Economic Benefits and Capacity Building
Beyond short-term gains, Uganda is set to experience sustained economic growth due to stable and secure fuel supply. Industries and businesses that depend on petroleum products can operate seamlessly, fostering increased productivity and investment.
UNOC’s involvement in bulk trading business has also played a crucial role in developing local expertise in fuel operations, creating jobs, and stimulating economic activity. Overall, there has been expansion in the business in the sector to include Transporters, Clearing and Forwarding Agents and Dipping services. To date there are 102 Oil Marketing Companies actively in business with UNOC. The company’s experience in managing petroleum imports will be invaluable when Uganda’s own oil refinery becomes operational in the future.
Towards Energy Independence
As Uganda progresses towards refining its own oil, reliance on fuel imports is expected to decline. Additionally new markets to serve Uganda’s own refinery are anticipated to come up making Uganda a vibrant export hub for petroleum products in the region. Finally, Uganda’s refinery will create up to 635 jobs as direct employment during construction and operation, and 5,400 + 300 jobs as indirect employment with sub-contractors and consultancies, stimulating economic growth. This transition will further enhance fuel supply and reliability.
Conclusion
UNOC’s role as the sole importer of petroleum products has already made a tangible impact on Uganda’s economy. With secure supply chains, stable pricing, and increased economic activity, the move has provided much-needed relief to Ugandans. Over time, the country is poised to reap even greater benefits, moving closer to energy independence and long-term economic stability.
The Writer is the Head of Corporate Relations, UNOC