Government takes over Jinja Storage Terminal
Ministers Ruth Nankabirwa (Energy) and Matia Kasaija (Finance) tour three fuel tanks, each with a capacity to hold 10 million litres of fuel, during the takeover of Jinja Storage Terminal (JST) on January 20, 2023. PHOTO/PHILIP WAFULA
What you need to know:
- The 30-million litre facility was established in the 1970s to store strategic reserves (petroleum products) and enhance the security of supply in the country
The government has assumed full management of Jinja Storage Terminal (JST), which was under a Joint Venture Partnership (JVP) with the consortium of companies led by One Petroleum Uganda Limited.
The 30-million litre facility was established in the 1970s to store strategic reserves (petroleum products) and enhance the security of supply in the country.
In 2017, the Ministry of Energy and Mineral Development handed it over to Uganda National Oil Company (UNOC), with the primary objective of restocking it and enhancing strategic fuel reserves for the country.
The 2017 JVP between UNOC and One Petroleum Uganda Limited aimed at restocking, operating and managing JST, and subsequently, the consortium refurbished the facility and made improvements that have since facilitated the continuity of operations.
Ms Proscovia Nabbanja, the UNOC chief executive officer (CEO), says the significance of the 2017 timing was the impending Kenyan General Elections, to which One Petroleum quickly mobilised and replenished the facility with about 13 million litres of fuel, giving some comfort in stock availability in the country.
“As an initiative to build the capacity of Uganda’s national Oil Company, the bulk trading business commenced in March 2020, with Shs1.7 billion of seed capital, revenues that we generated from JST at the time.
“To date, we have traded over 35 transactions with over 20 million litres of petroleum products. One Petroleum Uganda Ltd has been setting the stage, and since 2017, they improved the facility, invested in revamping the rail that connects the pier via a siding to the terminal,” Ms Nabbanja said at the takeover on Friday.
According to Ms Nabbanja, as is the norm with all mechanical equipment and infrastructure, the facility’s wear and tear require that UNOC make improvements to align with the level of operational efficiency and the quality of service that they intend to provide from the facility.
Ms Ruth Nankabirwa, the minister of Energy and Mineral Development, said the facility was established in the 1970s by the government at that time as a reserve to enhance the security of supply of petroleum products in the country.
“However, over the years, the population has grown, and there has been increased demand due to population growth and number of vehicles. We therefore need to manage this facility very well and plan for more tanks in this area (Jinja) or somewhere else,” Ms Nankabirwa said.
She added: “Before 2017, we didn’t have a company interested in the custodianship of such facilities; but we now have UNOC, and the government has trained people and we feel it’s time to make use of such manpower as we prepare for our oil in 2025.”
However, while the development sounds plausible, Mr Nathan Igeme Nabeta, the Jinja South Member of Parliament, says the project is plagued by its being detached from locals and a bad road network.
Despite being home to over 30 factories which remit billions of shillings in taxes, Jinja South constituency has some of the worst roads in Jinja City, including the 14Km stretch to the facility.
“This road, especially the one from Walukuba to Masese, is critical to all manufacturers in this town; however, 14 Kms of it is in a bad state. I am engaging the Ministry of Finance for funds in the fourth quarter so that it is worked on.
“I also appeal to UNOC to seek local content to offer services to Jinja Storage Terminal so that the locals can feel their presence like it is in Hoima and other areas. This will stimulate the economies of the areas in which you operate,” Mr Nabeta added.
Mr Matia Kasaija, the Minister of Finance, Planning and Economic Development, said the economy of any country heavily relies on energy and efficient logistics, adding that the role of fuel supplies in any economy is immense which underscores the need to have fuel storage facilities.
“This is even more important to a country that is land-linked like Uganda. I am pleased that our national oil company now has capacity to run and operate a fuel storage terminal and plan to have more terminals developed around the country,” Mr Kasaija added.
