KAMPALA – As the country prepares for its first oil barrel in 2022, the chairman of Mahati Infra Services Pvt Ltd – the company undertaking the project Mr Mike Mukula has said the fuel tank storage terminal that will provide a cheaper option to transport crude oil to Tanga Tanzania is set for completion in the first quarter of the next calendar year.
“We are going to work around the clock to fast track the construction process to ensure all ships and 14 tanks that have the capacity to store 70 million litres of fuel are ready as quickly as possible to start operation in April next year” he said.
Mr Mukula made the remarks while touring progress of works with stakeholders of the fuel storage terminal under the Uganda Lake Victoria Fuel Transportation project at Bugiri Bukasa, Katabi Town council, Wakiso district that has so far seen $270 (Shs994 bn) invested in it.
“The badges that are 118 metres by 23 metres will be able to get fuel from kisumu to here in between 14 to 16 hours in comparison to the average trucks that take long with some taking almost a week depending on the clearance and disturbances they have along the way” he said.
Mr Mukula said the tanks will be a major advantage for the country’s economy with the cost of fuel in transport halved.
“We are going to have adequate and sufficient capacity, one tank is nine million litres which will help Uganda have comparative advantage. When we finally finish the negotiations on the economics and look at the figures with Kenya pipeline, we think there will be another addition in reduction of fuel at the pump price with the fuel market companies like Total, shell vivo and many others” he said.
Mukula said the terminal has been approved as a duty-free port which will be a major saving for the oil marketing companies and the price transferred to the pump prices.
“Once the Buloba- Mpigi fuel tanks are finally done after the refinery in the Albertine region, we will be able to reverse pump the fuel to the market which is an advantage since it will be under the private sector. The government will no longer need to build pipelines and spend money which we can use in other areas like health, education and others” he said.
The commissioner petroleum Supply department in the ministry of energy Rev. Justaf frank Tukwasibwe said the project will offer free and fair competition for transport players in the petroleum sector.
“The location and project helps us to meet largely the demand, the first being Kampala which is 60 percent of consumption in the country but also it helps us to reach the wider market in every part of Uganda and transit countries that go through Uganda,” he said.
Mr Tukwasibwe said the incentives will be open to all players and not directed to one person or sector.
“They are still building and looking into negotiations with Kenya Pipeline Company to see if there are economies of scale to take advantage of them after they are compounded together, one will ascertain that the cost of transporting fuel from western Kenya to Uganda will be halved which will translate into pump prices” he said.
“The quality of fuel along the transit routes could be compromised when a truck parks whether within or outside Uganda and there are compromises that go along that, with this kind of investment once the fuel has been loaded on the badge there is no stoppage on the lake until the destination here, the fear of any likely contamination during transit will be totally eliminated” he said.
The operations manager Total Mr Lawrence Ssempagi said the water transport project will guarantee that the badges being constructed will not contaminate the regions freshwater body during transportation of fuel.
The deputy executive director Private Sector Foundation Uganda (PSFU) Mr Francis Kisirinya said the project will reduce costs for the sector when it comes to delivering goods to clients since the cost of doing business in the country is mainly driven by the cost of transportation.
“This will make our goods become more competitive not only in Uganda but also the regional market. This investment will help Uganda get the right size of investments required in a short time frame as we head towards becoming a middle-income country,” he said.