Govt To UNOC: Cut reliance on budget support and explore new financing
Oil company posts higher margins and faster project progress as first oil approaches
Finance Minister Henry Musasizi, together with Amos Lugoloobi and Cissy Mulondo, has directed the Uganda National Oil Company (UNOC) Board to explore innovative and sustainable financing options to strengthen its operations and reduce the company’s reliance on budgetary support from government.
Musasizi commended UNOC for keeping Uganda’s petroleum supply stable despite geopolitical tensions and conflicts disrupting major oil-producing regions globally, noting that the country has continued to enjoy fuel availability at relatively stable prices.
He nonetheless questioned the wide pump price variations recorded across the country, pointing to differences between Kabale, Masaka, Mbarara and Kampala.
Steady progress on flagship oil projects
UNOC reported strong progress on Uganda’s major oil and gas developments, with the East African Crude Oil Pipeline (EACOP) at 89.4 percent completion, the Kingfisher development at 79.36 percent and Tilenga at 74.2 percent by end-June 2026.
As Uganda advances toward first oil, UNOC expects to meet about USD 72 million in cash-call obligations.
Sole importation and rising margins
On petroleum supply, UNOC’s sole importation business grew by 39 percent, with the company now supplying 36 Oil Marketing Companies.
Gross margins rose from Shs387 billion to Shs540 billion in FY2025/26. Under its USD 2 billion financing facility with Vitol Bahrain, UNOC has disbursed USD 150 million, while Shs536 billion has been transferred to the Ministry of Finance.
Infrastructure push
UNOC is also advancing several major infrastructure projects, including the 320-million-litre Kampala Storage Terminal, a 110-million-litre storage terminal in Mombasa, a planned 60,000-barrel-per-day refinery, and Phase One infrastructure at Kabalega Industrial Park, where Shs37.96 billion has already been secured.
A push for self-financing
The company has proposed a sustainable self-financing model, noting that its sole-importation business alone generates about USD 3 million a month in administrative charges.
Even as it seeks greater financial independence, UNOC maintains that government’s continued commitment to capitalise the company remains critical to unlocking its full potential to drive Uganda’s economic growth.
The engagement underscores government’s broader push to build a financially sustainable UNOC capable of delivering greater value from Uganda’s petroleum resources as the country moves closer to producing its first oil.
