Market Trends of Uganda Petroleum Products Industry
This section covers the major market trends shaping the Uganda Petroleum Products Market according to our research experts:
Diesel as a Significant Petroleum Product
- Diesel is one of the major petroleum products consumed mainly in the road and finery industry of Uganda. As of 2020, the road sector consumed nearly 555.6 million liters, while rail consumed 39.6 million liters, and the fishery consumed 99.2 million liters.
- Petroleum products in Uganda are not produced locally due to a lack of oil refineries. Instead, they are imported from Kenya, China, United Arab Emirates, and a few others. In 2020, Uganda imported nearly 992.2 million liters of diesel.
- Historically, the diesel import increased till 2019. However, due to the COVID-19, the import volume decreased on account of reducing demand in the road and railway sectors.
- During the study period, the segment is expected to grow on account of the increasing human population, which would result in increasing demand for diesel for various industrial and commercial purposes.
- Further to meet domestic demand, the country is expected to commission the country's first oil refinery by 2027, which would support the government in mitigating the domestic diesel demand.
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Increase in Transportation Service to Drive the Market
- The transport sector is the major consumer of fossil fuels, accounting for about 75% of the fossil-fuel import bill. In 2020, the sector consumed nearly 86.5% of the total petroleum products imported.
- Among all the sectors, the automobile is the primary consumer, which consumed nearly 1.2 billion liters of petroleum products in 2020.
- Domestic Aviation is the second prime consumer of petroleum products, which is further expected to increase on account of growing air connections of Uganda with other regions like the Middle East.
- The increasing population of automobiles would be another factor that would boost domestic consumption of petroleum products. Growing per capita income would support the affordability of passenger vehicles and two-wheelers.
- The railway is another major consumer of petroleum products, that consumed nearly 39.6 million liters of diesel in 2020. With upcoming projects like the Tororo to Namanve railway line and Tororo-Gulu railway rehabilitation, the sector is expected to increase petroleum product consumption during the forthcoming years.
- Hence, the growth of automobile, rail, and aviation is expected to support the transportation sectors to act as a significant driver for the market to grow during the study period.
