Uganda Petroleum Products Market - Growth, Trends, Covid -19 Impact, and Forecasts (2022 - 2027)

The Uganda petroleum products market is expected to grow at a CAGR of around 3.1% during the forecast period. Due to the COVID-19 pandemic, the market witnessed a significant negative impact with a drop in demand for petroleum products due to the decline of economic activities in the country. Factors like growth in consumption of petroleum products for various commercial purposes like fishery are likely to propel the market. However, dominant reliance on wood fuel is expected to hinder the market growth during the forecast period.

Key Highlights

• Diesel is likely to have high consumption during the forecast period on account of wide applications like road, railway, and fishery industry.
• Uganda is highly dependent upon wood fuel. Nearly 93% of the energy comes from wood fuel, the rest 5% comes from petroleum products, and 1.5% comes from hydro power. Hence, petroleum products companies operating in the country have ample opportunity for expansion if the government offers legal and institutional framework for downstream operations.
• An increase in transportation services is expected to propel the market during the forecast period.

Key Market Trends

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.

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.

Competitive Landscape

The Uganda petroleum products market is fragmented. Some of the major companies include Vivo Energy Uganda Ltd, TotalEnergies SE, Nile Energy Limited, Stabex International Limited, and Hass Petroleum (U) Limited among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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