10 Oct 2017

Fuel imports in Uganda reveal margin hit of 85 million litres

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Uganda’s fuel imports as of mid-September were 85m litres, with demand growing at 7% per annum, the energy ministry has said. While briefing parliament on Tuesday, energy minister Irene Muloni said the 85m litres comprised of 34.6m litres of petrol, 42.5m litres of diesel, and 2.6m litres of kerosene. Jet fuel imports stood at 5m litres. The majority of the petroleum products, 92%, were imported through a Mombasa port in Kenya, while only 8% arrived via Dar es Salaam on the Tanzanian coast. The average daily consumption of all fuel products is 5.4m litres, according to the ministry. Ms Muloni said prices have been comparatively stable over the last few months, but could go higher in future.
Uganda has several unexplored economic opportunities, and is a key component in Africa’s growth prospects. The country is the 127th largest export economy in the world. During the last 5-6 years the imports increase at an annualized rate of 3.4%, from $4.66B (2010) to $5.52B (2015). The country’s most recent imports are led by Refined Petroleum followed by Packaged Medicaments. Uganda’s fuel imports as of mid-Sept touched at 85m litres, with demand growing at 7% per annum, as mentioned by the Minister for Energy and Minerals. While briefing parliament recently, energy minister Irene Muloni announced the 85m litres covered of 34.6m litres of petrol, 42.5m litres of diesel, and 2.6m litres of kerosene. However, Jet fuel imports stick up at 5m litres.
Total petroleum imports in Uganda rose by 9.7% in 2014 compared with last year 2013. On the flip side, Kerosene declined by 8.4%, whereas diesel and petrol imports increased by 8.2% and 13.4% respectively. Overall, petroleum imports have climbed by 48.7% since 2007. Ms Irene Muloni also declared the plans and strategies to keep Uganda well-supplied hinge on the effectiveness of the import routes and the in-country perfect storage services. In this case, Mombasa and Dar es Salaam ports together with other Kenya terminals being used by oil marketing companies to import items into Uganda.
At least 43 oil marketing companies have active licenses to import petroleum products into the country. The minister noted that as for stocks, Uganda has a combined total cover of 14 days’ supply. Of these, 12 days are provided by the private companies and two days by government storage facilities at Jinja. Previous statistics from the Bank of Uganda revealed that the sustained plummeting of oil prices on the international market had contributed to the decline in the country’s import bill by 21.4% in the last year. The import bill touched at $132m, or Shs445.2bn, previous year.
The government has remained devoted to its strategy of constructing a local refinery to normalize the effects of the fuel import bill, however at the same time tapping regional export markets. The planned refinery will produce Kerosene, LPG, Diesel, Petrol, Heavy Fuel Oil (HFO) and jet fuel. A feasibility study by the Foster Wheeler (well-known British consultancy) said the refinery was commercially viable with a $3.2bn of NPV (net present value) at a 10% discount rate and an IRR (internal rate of return) of 33%.

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