Starting January 2026, Uganda will require all fuel distributors to blend locally produced ethanol into the petrol sold nationwide, in a move aimed at lowering fuel costs and promoting cleaner energy use, reports Business Insider Africa.
The announcement was made by Energy Minister Ruth Nankabirwa, who said the Uganda National Oil Company (UNOC) will lead the implementation of the blending process.
“This initiative is not just about improving fuel quality; it’s a significant step towards environmental protection and reducing the overall cost of fuel for Ugandans,” Nankabirwa said, as reported by Reuters.
Under the new policy, fuel suppliers must begin by blending 5% ethanol into petrol, with the percentage expected to increase to 20% over time, depending on local ethanol production capacity.
Fuel blending involves mixing conventional fossil fuels like petrol with renewable sources such as ethanol. Ethanol, commonly made from molasses—a byproduct of sugar production—is considered a cleaner and more sustainable alternative to traditional fuels. It also supports Uganda’s goals to reduce carbon emissions and reliance on imported fuels.
Uganda currently spends around $2 billion annually on petroleum imports. The government hopes the new policy will reduce this burden and support the country’s broader energy development strategy.
In 2023, Uganda centralized fuel imports by granting exclusive petroleum supply rights to a subsidiary of global energy company Vitol. The country, which currently relies entirely on imported refined fuels, is also preparing to launch commercial crude oil production next year, with plans to export through a pipeline to Tanzania’s Indian Ocean coast.
In another major step, a United Arab Emirates-backed firm secured a deal in March to construct Uganda’s first crude oil refinery. The facility will have a capacity of 60,000 barrels per day. UAE-based Alpha MBM Investments will own a 60% stake in the refinery, while Uganda’s state-owned National Oil Company will hold the remaining 40%, according to a statement from President Yoweri Museveni’s office.
