The Uganda National Oil Company (UNOC) has imported over 1,000,000 liters of diesel in a bid to encounter the fuel shortage that was caused by the Corona-virus (COVID-19) outbreak, which has seen many countries, including Uganda, close borders to truck drivers, who are the main transporters of fuel.
According to officials at UNOC, the fuel was early this week delivered to Jinja Storage Terminal (JST) via railway.
The fuel-laden wagons were transported from Kisumu Port to Jinja on Lake Victoria and later hauled via rail to Jinja Storage Terminal, which is one of the national fuel reservoirs.
Commenting about the development, Ms. Proscovia Nabanjja, the Chief Executive Officer (CEO) UNOC, tweeted that; “This is expected to improve the efficiency of fuel supply.”
This comes a few days after a UNOC delegation led by the CEO, Ms. Nabbanja, held a meeting with the Inter-Agency Task Force on COVID-19 chaired by Maj. Gen. Leopold Kyanda, to give an update on the current National Strategic Fuel Reserves and the on-going UNOC projects. The event was held at Police Headquarters, Naguru, where Ms. Nabbanja briefed the Inter-Agency Taskforce on COVID-19 about UNOC’s current operations, projections, and budgetary concerns vis-à-vis the demand and scarcity for fuel due to the COVID-19 lockdown.
It should be noted that in November last year Members of Parliament called for increased funding for UNOC so that the entity would be able to procure enough fuel to restock all the national reserves and to operate effectively.
The move came after UNOC officials told Parliament that the Company needed at least $759.4 million (about Shs2.8 trillion) to cater to the government’s equity in oil projects and execute its mandate effectively.
The Parliamentary Committee on Natural Resources noted in their report that; “Uganda National Oil Company is not adequately financed to realize its equity contribution to the development of the refinery, pipeline, and petroleum storage terminal.”
The report also added that; “The budget ceiling for UNOC for the financial year 2019/20 is Uganda Shs31.48 billion against the initial budget requirement of Shs102.3 billion, leaving a funding gap of Uganda Shs70 billion.”
The MPs thus concluded that as a result of the funding gap, “UNOC cannot fully participate in key activities with joint venture partners – Tullow Uganda, CNOOC Uganda, and Total E&P Uganda, which are fully funded thus failing to protect government’s commercial interests in the development of the oil and gas sector,”
UNOC is established by section 42 (I) of the Petroleum (Exploration, Production, and Development) Act, 2013 as a private company, wholly owned by the state to manage the country’s commercial interests and state participation in the petroleum sub-sector.
Under section 43 of the same Act, among other functions of the national oil company is to manage business aspects of state participation, develop deep expertise in the oil and gas industry and participate in accordance with the terms of petroleum agreements, in joint ventures in which the company holds an interest on behalf of the state.
“UNOC should adequately be financed to ensure good management of Uganda’s commercial interests within the oil and gas sub-sector,” the Committee recommended in the report
The Uganda National Oil Company Limited (UNOC) was established under Section 42 of the Petroleum (Exploration, Development, and Production) Act 2013 and incorporated under the Company’s Act 2012. It is a limited liability company wholly owned by the Government of Uganda.
The overall function of UNOC is; To handle the State’s Commercial interests in the Oil and Gas industry and ensure that the resource is exploited in a sustainable manner.
UNOC took over management of the Jinja Storage Terminal (JST) and entered into a Joint Venture Agreement (JVA) with One Petroleum (Uganda) Limited to operate the terminal in May 2017.
UNOC is mandated to develop, manage, and operate storage terminals since it holds national strategic fuel reserves to ensure the security of supply. This mandate is executed through its wholly-owned subsidiary the National Pipeline Company Limited.
UNOC currently manages and operates the 30 million liter capacity Jinja Storage Terminal (JST) in eastern Uganda and has commenced a phased development of a 240 million liter capacity Kampala Storage Terminal (KST) located North-West of Kampala. Our long-term strategy is to develop storage terminals in other regions of the country.
According to UNOC projections, the Kampala Storage Terminal (KST) will receive, store, and serve as a central distribution terminal for refined petroleum products from the proposed refinery based in Kabale (Hoima). It will also serve as a central hub for the development of regional pipeline infrastructure for refined products. The process of selecting a strategic investment partner for the project is ongoing.
These terminals will also serve as trading hubs for bulk petroleum products and provide hospitality storage services for other fuel importers.