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Kampala, Uganda | URN | The newly passed National Petroleum Policy 2025 is ushering in a new regulatory framework for the oil and gas sector as the country prepares to pump its crude oil from the ground.
The Policy was launched by the Deputy Speaker of Parliament, Thomas Tayebwa, at the sidelines of the 11th Oil and Gas Convention taking place at Speke Resort Munyonyo.
It is a successor of the 2008 policy, which largely regulated the exploration and development stage of the sector.
The previous policy’s goal was to use the country’s oil and gas resources to contribute to the early achievement of poverty eradication and create lasting value to society.
The goal of the new policy is to “To sustainably exploit and utilize Uganda’s petroleum resources in a manner that maximizes in-country value addition, fosters equitable socio-economic development, and safeguards the environment.”
The new policy is further vesting more powers in the Petroleum Authority of Uganda (PAU), which has regulated the sector for ten years since its establishment.
The Petroleum Authority, under the 2008 national Oil and Gas Policy for Uganda, was regulating the Upstream (Exploration, drilling, and production of oil and gas).
It was also charged with the regulation of the midstream operations (transportation, storage, and the initial processing of crude oil). When the new policy takes effect in the coming financial year, PAU will take over downstream sector regulation, which involves refining, distribution, marketing, and retail petroleum products.
The downstream operation regulations had since 1994 been under the Ministry of Energy and Mineral Development guided by the Petroleum Supply Act, which governs the importation, marketing, and distribution of petroleum products.
The Ministry has been implementing the standard requirements in collaboration with the National Bureau of Standards.
PAU, Executive Director, Ernest Rubondo, had, in December 2025, during a press conference, hinted at the policy change. The Policy had been finalized in October 2025, but was yet to be cleared by the cabinet.
“The new oil and gas policy places regulation of the entire petroleum value chain under a single regulator. As a result, the Petroleum Authority of Uganda will now regulate downstream activities, including operations such as petrol stations, among others,” said Rubondo.
This represents a major change from the previous policy regime, where oversight gaps existed, particularly in the downstream segment. Transportation of petroleum products and operations of fuel stations were not comprehensively regulated under the earlier framework.
The policy closes those gaps, bringing fuel transportation, storage, distribution, and retail operations under a unified regulatory system.
PAU has, over the years, been credited for managing the upstream and midstream operations through what some have described as a robust management team.
Sources who closely participated in the development of the policy told URN that it was found wise that the Ministry of Energy is disengaged from the regulatory aspect of the downstream sector, which mainly relates to pump stations.
The new changes were also due to the fact that Uganda is planning to refine the petroleum products from a greenfield refinery to be located in Kabalega, Hoima.
A source who asked to remain anonymous revealed that PAU has, in the past, tried to assert its independence in the sector since UNOC was charged with the exclusive role of importing petroleum products.
The sources said the new mandate to the Petroleum Authority means that it has to expand its human resources and financial costs in wages and operational costs, among others.
The Authority currently employs about 220 members of staff who have been recruited during the ten years of existence.
The estimated cost of implementing the Policy over the first five years is over 9.32 billion shillings. It is expected that about 90% of the cost will be met through contributions from international oil companies, with the balance funded from domestic revenues and complementary support mechanisms.
“The financial outlook for Uganda is highly positive. Over the lifetime of the current petroleum resources, the State Cumulative Cash Flow is projected at approximately UGX 121.975 trillion,” says the policy.
The makers of the policy note that the projected cumulative cash flow significantly outweighs the policy implementation costs, ensuring that petroleum development delivers substantial net benefits to the country.
So far, the achievements from the implementation of the two policies include: the commercial discovery of 6.5 billion barrels of stock tank oil initially in place, with 1.4 billion barrels estimated to be recoverable.
Cumulative foreign investment of approximately USD 7.5 billion (in the upstream and midstream projects) and USD 1.5 billion per year in the downstream projects.
It is estimated that more than 15,387 direct jobs have been created over the years. The Ministry’s Permanent Secretary, Engineer Irene Batebe, told URN that the implementation of the new policy takes effect in the coming financial years after some regulatory amendments through parliament.
She said the new policy is designed to consolidate past gains while maximizing benefits from petroleum resources. It also highlights the commercial mandate of the Uganda National Oil Company (UNOC), which manages the state’s interests in production licenses and is expected to play a larger role as the industry matures.
Apart from vesting more powers in the Petroleum Authority of Uganda, the policy allocates roles to various Ministries, the Bank of Uganda, Uganda Revenue Authority, and several other authorities, local governments, and civil society, among others, in facilitating the desirable implementation of petroleum activities.
The National Petroleum Policy 2025 outlines several strategic priorities, including: Strengthening regulatory oversight across the entire value chain, promoting value addition, and reducing export of raw materials.
It further envisages an increase in national participation and local content, and ensuring environmental protection and safety compliance, coupled with supporting long-term, sustainable development of the sector.
The policy also aims to improve efficiency in licensing and create a more predictable environment for investors.
