Uganda starts construction of oil refinery

Construction of an oil refinery plant estimated to cost Shs 44 bn has started in Nalukolongo-Ndeeba industrial area and it is expected to start production of several petroleum products this year. The plant is being built by a local trading company, Victoria Candles, in conjunction with Arabian Lubricants Company, based in the Middle East.
According to the Victoria Candles Executive Director, Hajj Lubega Seguya, the plant will be built in three phases. He said the Uganda Investment Authority [UIA] has cleared the refinery and licensed its operations to begin in September.

"We expect to produce at least 60,000 litres of oil every day for sale in the local market under the brand name-Nation Oil," Hajj Seguya said in Kampala adding that, "We expect to employ about 50 people at the beginning."
The factory will be using base oil [SE50] to produce blending oil; a product used in factory machines, electric transformers, diesel and petrol motor engines, gear box oil, 2T oil for motorcycles and light candles.

The two companies, however, are asking the government to offer tax exemption and to also provide petroleum training courses to their employees to prepare them for work in the petroleum exploration sector.
"As medium-size investors, our wish is to see the government helping us to train workers and offering us a tax holiday until we take off," Hajj Seguya told. The decision by local investors to invest in oil processing will boost Uganda's economy as the country has been losing a lot of money by importing the finished products.

The government has already said it will build an oil refinery following the discovery of commercial oil deposits in the north and north-west parts of the country. According to the Energy and Mineral Development Minister, Mr Hilary Onek, the country plans to gradually reduce its dependence on imported oil.
"We will add value to our oil in local refineries," he said. Landlocked Uganda is the biggest consumer of Kenya's petroleum exports, taking in about 40 % ofall exports.