Uganda has sufficient fuel reserves

Uganda has sufficient fuel reserves to last into late May, the government has announced, dismissing widespread social media claims of an impending shortage.

In a joint statement issued Tuesday, the Ministry of Energy and Mineral Development and the Uganda National Oil Company (UNOC) described the circulating reports as misleading and warned that such speculation risks triggering panic buying and artificial price hikes.

The reassurance comes at a time of heightened global uncertainty, as attacks by Yemen’s Houthi rebels on vessels navigating key shipping routes continue to unsettle oil markets. The Strait of Hormuz, through which nearly a fifth of the world’s oil supply passes, remains a critical chokepoint, with any disruption posing far-reaching implications for global energy security.

Energy Minister Ruth Nankabirwa Ssentamu revealed that, as of March 27, Uganda held 81 million litres of petrol, 80 million litres of diesel, and 18.5 million litres of Jet A-1 fuel. These reserves translate into between 22 and 30 days of national consumption.

“These levels are in full compliance with the Petroleum Supply Act, 2024, which requires UNOC to maintain a minimum of 21 days of strategic reserves to cushion the country against supply shocks,” she said.

The Ministry further indicated that incoming shipments scheduled for April are expected to significantly boost national stocks. More than 350 million litres of petroleum products are set to arrive through Kenya’s coastal infrastructure.

To mitigate risks associated with volatile maritime routes, additional consignments are being rerouted through Tanzanian ports, including Dar es Salaam, Tanga, and Mtwara. Officials say this diversified logistics strategy ensures continuity of supply despite ongoing geopolitical tensions.

While supply remains stable, authorities cautioned that fuel prices could still rise, driven by global market volatility and exchange rate pressures. International crude oil benchmarks have trended upward in recent months, reflecting heightened risk premiums linked to instability in the Middle East. Uganda’s heavy reliance on imported refined fuels, estimated at around 90 per cent, further exposes the country to external shocks.

A weakening Uganda shilling against the US dollar is expected to increase import costs, a burden that may ultimately be passed on to consumers. Transport sector players welcomed the government’s assurance on supply but raised affordability concerns.

“Availability is one side of the story; affordability is another,” said Fred Okema of the Uganda Bus Drivers Association, noting that sustained price volatility could erode already thin profit margins in the transport sector. He called for stricter enforcement of the Petroleum (Pump Prices) Regulations, 2022, to enhance pricing transparency and prevent opportunistic mark-ups.

The aviation sector also expressed cautious optimism, noting that current Jet A-1 reserves provide a temporary buffer for flight operations, even as global fuel costs remain unpredictable.

Uganda’s relative resilience against immediate shortages has been attributed to reforms under the National Oil and Gas Policy, which strengthened state oversight of bulk fuel imports. Since 2019, UNOC has played a central coordinating role, replacing a previously fragmented, private-sector-led supply system.

Tony Otoa, Chief Corporate Affairs Officer at UNOC, underscored the strategic importance of fuel to Uganda’s economy, noting that it accounts for approximately 70 per cent of the country’s commercial energy consumption. “Even modest price fluctuations can have ripple effects across transport, manufacturing, and household budgets,” he said.