Overview:
A key link in the value chain — the 60,000-barrel-per-day refinery planned for Hoima — will not be ready when production begins. This means that in the early years, all of Uganda’s crude will be exported through the East African Crude Oil Pipeline (EACOP), while the country continues to import fuel for domestic use.
Uganda is on course to pump its first oil by July 2026 under the Kingfisher and Tilenga projects in the Albertine Graben. But while crude will start flowing, Ugandans will have to wait longer to see locally refined petrol, diesel, or petrochemical products.
A key link in the value chain — the 60,000-barrel-per-day refinery planned for Hoima — will not be ready when production begins. This means that in the early years, all of Uganda’s crude will be exported through the East African Crude Oil Pipeline (EACOP), while the country continues to import fuel for domestic use.
“Rest assured that the refinery is coming,” said Frank Mugisha, acting Commissioner in the Petroleum Upstream Department. “And this time, we are not talking of moving targets. When it comes to first oil, it is a fixed target. When it comes to the refinery, it is a fixed target.”
Years Behind Schedule
The refinery project has already faced shifting timelines. Under an earlier framework with the Albertine Graben Energy Consortium (AGEC), construction was expected to be completed by 2027. That schedule assumed ground-breaking in 2023, but no work began.
Now, a new agreement signed with UAE-based Alpha MBM Investments LLC in March 2025 aims to revive the project. The company, which will fund 60% of the venture under a public-private partnership, is still yet to make a Final Investment Decision (FID). Optimistically, construction could take at least four years once works begin, suggesting completion closer to 2028 or beyond.
Uganda National Oil Company (UNOC), which represents government’s commercial interests, plans to establish Kabale Refinery Company Limited to oversee the project. Several key agreements — including the Host Government Agreement, Crude Supplier’s Agreement, and Shareholders’ Agreement — must be signed before the refinery moves forward.
Delayed Value Addition
The refinery has long been touted as central to Uganda’s oil strategy, ensuring energy security, creating jobs, and cutting billions spent annually on importing fuel. A 2019 government-commissioned study confirmed that Uganda’s planned refinery would be a Residue Fluid Catalytic Cracker (RFCC) type — suited to process the country’s waxy crude.
But until construction begins, Uganda’s oil will be exported unrefined. Industry analysts warn this could delay broader economic transformation. “First oil will bring revenues,” said one petroleum expert, “but without a refinery, the domestic economy feels less of the immediate benefit.”
Infrastructure Still Missing
Beyond the refinery itself, key infrastructure is yet to start. The planned 211-kilometer multi-products pipeline, designed to carry refined products from Hoima to Namwabula in Mpigi District, remains on the drawing board.
This gap means that even after first oil, Ugandans will still rely on imported fuel at the pump. The paradox of being an oil producer that continues to import petrol and diesel may linger for several years.
Strategic Stakes
Despite delays, government insists the refinery remains a fixed priority. President Museveni in August reaffirmed Uganda’s commitment, describing the Alpha MBM partnership as “a decisive step” toward completing the long-awaited project.
The Natural Resource Governance Institute (NRGI) has also underlined the refinery’s importance, noting it could significantly strengthen Uganda’s balance of payments, shield the economy from global fuel shocks, and guarantee stable supply.
Until then, however, Uganda’s oil journey will start with exports first — and local refining later. For now, the country must balance the promise of new revenue from crude sales with the reality that energy independence remains just out of reach.