Uganda Mandates Ethanol Blending to Cut $2 Billion Petroleum Import Bill
Uganda will require all fuel distributors to blend locally produced ethanol into petrol starting January, in a strategic move to reduce the East African nation’s substantial $2 billion annual petroleum import expenditure. The energy ministry announced this significant policy shift as part of broader clean energy promotion efforts.
The blending program begins with a mandatory 5% ethanol content in all petrol sold throughout the country, with plans to gradually increase the ratio to 20% based on supply availability. The bioethanol, primarily produced from molasses as a sugar production byproduct, will help reduce carbon emissions while supporting local agricultural industries.
This initiative comes as landlocked Uganda prepares to begin commercial crude oil production next year, with plans to export through a pipeline to Tanzania’s Indian Ocean coast. The country currently relies on exclusive petroleum product supply rights granted to a Vitol unit in 2023.
The ethanol blending requirement represents a dual strategy of reducing import dependency while promoting environmental sustainability. The policy is expected to provide significant economic benefits by supporting local ethanol production capacity and reducing foreign exchange outflows for petroleum imports.
The gradual implementation approach allows the domestic ethanol industry to scale production capacity to meet increasing demand as blending ratios expand over time.
Source: Reuters
