Uganda to End Kenya’s Oil Dependency Through Multibillion Shillings Deal With UAE

Uganda is set to reduce its reliance on Kenya for oil imports after signing a multibillion-shilling agreement with the United Arab Emirates (UAE). In a statement dated Saturday, March 29, 2025, Uganda’s President Yoweri Museveni announced the signing of an oil refinery implementation agreement between Uganda and Alpha MBM Investments LLC, a UAE-based company.

“I want to thank His Highness Sheikh Mohammed Bin Maktoum and our friends from the UAE for their commitment to investing in Uganda.

Today, I witnessed the signing of a historic oil refinery implementation agreement between Uganda and Alpha MBM Investments LLC, a company based in the UAE,” read the statement.

According to Museveni, the agreement will pave the way for the construction of a crude oil refinery in Hoima District, with a capacity of 60,000 barrels per day.

Museveni Emphasizes that Oil Deal Will Enable Uganda to Reduce Reliance on Imports

Museveni emphasized that the refinery would not only satisfy Uganda’s domestic fuel needs but also allow the country to export refined petroleum products, reducing its reliance on imports.

At the same time, the president highlighted the importance of value addition, stating that Uganda must shift away from exporting raw materials and instead focus on refining its resources to promote economic growth.

“We must stop exporting raw materials and instead add value to everything we produce,” Museveni added.

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Currently, Uganda has been relying on Kenya for importing refined petroleum products. The refined petroleum products include petrol, diesel, and kerosene, which are essential for transportation, industry, and domestic use in Uganda.

The importation process for these products has been streamlined through the Mombasa port in Kenya, a key hub for petroleum imports in the region. From there, they are transported to Uganda by road or pipeline.

Stalemate Between Kenya and Uganda Over Importation of Petroleum Products

At one particular point, there was a stalemate between Uganda and Kenya regarding the importation of oil due to licensing and pricing issues.

Uganda wanted to import refined petroleum products directly through the port of Mombasa but faced challenges in obtaining the necessary licenses from the Kenyan government.

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In January 2024, Uganda raised concerns about the increased prices of petroleum products imported via Kenya, which created tensions between Kenya and Uganda.

As a result of the stalemate, Uganda considered using Tanzania as an alternative route for its oil imports.

However, after negotiations and legal resolutions, Kenya agreed to grant the Uganda National Oil Corporation (UNOC) the license to import fuel directly.

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