By Our Staff Reporter

Mpigi, Uganda | September 19, 2026
President Yoweri Kaguta Museveni has presided over the groundbreaking ceremony for the construction of the 320-million-litre Kampala Storage Terminal in Mpigi District, a major project expected to strengthen Uganda’s petroleum security and improve the country’s capacity to supply fuel to domestic and regional markets.

The terminal is being developed by the Uganda National Oil Company (UNOC) on a 300-acre piece of land at an estimated cost of US$250 million.

The facility will increase Uganda’s capacity to store refined petroleum products and support the establishment of strategic national fuel reserves.

Uganda currently has an estimated petroleum storage capacity of about 160 million litres, comprising a 30-million-litre facility in Jinja, a 70-million-litre facility at Mahathi in Kawuku and approximately 60 million litres operated by private-sector fuel companies.

Speaking at the groundbreaking ceremony, President Museveni said expanding petroleum storage infrastructure was essential as Uganda continues to develop its oil and gas sector and seeks to strengthen the security of fuel supplies.

The President recalled that the government had previously faced challenges arising from Uganda’s dependence on middlemen in the procurement of petroleum products through Kenya.

“Now that we are moving well on developing our resources, we must plan for storage,” President Museveni said.

He said government interventions had contributed to reductions in the cost of petroleum products, citing reductions in the cost of diesel from US$118 to US$83 per metric tonne, petrol from US$97.5 to US$61.5 per metric tonne, and aviation fuel from US$114.25 to US$79.25 per metric tonne.

President Museveni said the new terminal would improve the reliability and efficiency of fuel supply while supporting the creation of strategic reserves.

However, he cautioned that the 320-million-litre facility should not be considered the final solution to Uganda’s petroleum storage requirements, saying the country would need to plan for even larger storage facilities as demand increases.

Uganda strengthens regional petroleum cooperation

President Museveni also commended Vitol Bahrain for supporting Uganda’s fuel supply chain, including supplying petroleum products on credit and allowing government to make payments when funds become available.

He further welcomed increased cooperation among East African countries in strengthening regional petroleum security.

The President said Uganda would participate in the development of a larger refinery in Tanga, Tanzania, as part of regional efforts to improve petroleum supply and infrastructure.

“I am happy that Her Excellency Samia Suluhu has sent a delegation, so we are working together with East Africa to develop our petroleum,” he said.

Museveni warns against environmental degradation

During the ceremony, President Museveni also urged communities to protect wetlands and other natural ecosystems.

He commended residents of Mpigi for preserving papyrus wetlands he observed while travelling to the project site, saying the natural environment should be protected as the country pursues economic development.

“This is how God made Uganda and we should try to keep it that way,” he said.

The President also expressed concern over the proximity of a garbage dumping site to the petroleum storage facility, describing the situation as dangerous.

He called for alternative waste-management solutions, including the possibility of using incineration to generate electricity.

UNOC ready to begin construction

The Chairman of the UNOC Board of Directors, Mr. Mathias Katamba, described the Kampala Storage Terminal as an important milestone for Uganda’s petroleum industry and said it would contribute to positioning the country as a regional hub for petroleum products.

Katamba said UNOC had secured the necessary government and building permits from the relevant local authorities, as well as a petroleum facility construction permit from the Ministry of Energy and Mineral Development.

According to UNOC, the contract for the Engineering, Procurement and Construction (EPC) works became effective on September 18, 2026, with construction activities expected to commence immediately following the groundbreaking ceremony.

Detailed engineering is expected to be completed by March 2027, while commissioning of the terminal is scheduled within 24 months of the contract effective date, around September 2028.

Katamba said the project is based on studies and planning that culminated in the Kampala Storage Terminal Master Plan of 2017.

He said the additional storage capacity would support strategic national petroleum stocks and strengthen Uganda’s ability to respond to disruptions in fuel supply.

Government pledges support for the project

The Minister of Energy and Mineral Development, Dr. Monica Musenero, said the terminal would serve as a strategic storage hub and play a significant role in strengthening Uganda’s petroleum supply chain.

She welcomed UNOC’s commitment to completing the project within 24 months and pledged the Ministry’s support towards its implementation.

Dr. Musenero, however, called for improved road connectivity to the terminal, particularly the link to the Mpigi Expressway, to facilitate transportation and distribution.

She also emphasised the need for railway connectivity to support the movement of petroleum products and reduce pressure on road transport.

The Permanent Secretary in the Ministry of Energy and Mineral Development, Eng. Irene Batebe, said the terminal would strengthen Uganda’s ability to maintain strategic petroleum stocks and respond to potential disruptions in fuel supply.

She said the project would significantly increase the country’s existing petroleum storage capacity.

Batebe added that government was also working to expand other storage facilities, including the Jinja Storage Terminal, as part of wider efforts to strengthen Uganda’s petroleum supply chain.

Once completed, the Kampala Storage Terminal is expected to increase Uganda’s strategic petroleum reserves, reduce vulnerability to fuel supply disruptions and improve the distribution of refined petroleum products to both domestic and regional markets.