Uganda will require fuel distributors to blend locally produced ethanol into all petrol sold in the country starting next January, the energy ministry said on Tuesday, a measure that could reduce the East African nation’s petroleum import bill.
Uganda imports about $2 billion worth of petroleum products annually. It handed over exclusive rights for the supply of all such products to a unit of global energy trader Vitol in 2023.
The blending programme is also part of government policy to promote clean energy, the ministry said in a statement, as bioethanol can help in efforts to reduce carbon emissions. Ethanol is mostly made from molasses, a byproduct of sugar production.
Fuel dealers will initially be required to blend 5% ethanol into all petrol sold, but the ministry said it would gradually increase the ratio to 20% “on the basis of availability of supply”.
Landlocked Uganda expects to start pumping commercial volumes of crude oil next year, hoping to export it via a pipeline to a port on Tanzania’s Indian Ocean coastline.
