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To Say That Uganda Is Transporting Crude Oil by Trucks is the Peak of Ignorance

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By Elison Karuhanga

I have read a number of allegations that the oil companies and the government are secretly dealing in Uganda’s oil. The allegation is that trucks/trailers are being used to export our oil as the common man waits for production to start.

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I can say without fear of contradiction that this particular allegation is untrue, false and utterly ridiculous. It is sad that the allegation is coming from minds capable of better things. I hope in this simple piece to demonstrate this as clearly as possible. Let us start by agreeing on the basic facts.

Oil companies like TOTAL and CNOOC are businesses. They are mainly here to make a profit. They will make the profit by producing and selling oil. They hope, like all businesses to make sure that when they sell the oil they will get enough money to meet their costs and have money left over-this is called profit. So, let us agree that their motive is not hidden. Their motive is profit.

The second fact we can agree on is that the oil is mainly got from underground. When it comes out of the ground it is in its “raw form”. This “raw form” is what we call crude oil.

Would oil companies make profit if they secretly put the crude oil in trailers and drove it to Mombasa? The answer is no. In fact it would be one of the worst business decisions ever taken in the history of business.

How is oil transported?

Crude oil is mainly transported across borders and over long distances by pipelines. The reason why Uganda plans to build a pipeline is not because pipelines are fashionable and not because we lack trucks. It is because the pipeline is the most cost effective way to transport crude oil. Uganda’s oil will be transported to Tanga in Tanzania. From Hoima to Tanga is about 1,455 km. From Hoima to Mombasa is around 1,375 km. The cost of transportation in the pipeline ranges between US$ 12.2 to US$ 15 per barrel. For the sake of argument we shall assume Uganda will pay a tariff of US$ 20 per barrel and not 12 dollars. That is about 70,000 shillings. A barrel of oil is equivalent to 159 liters. Therefore to transport cargo of 159 liters of oil in the pipeline for a distance of 1,455 km it would cost UGX 70,000.

If an oil company decided instead to use a truck how much would it cost? Let us ignore the risks associated with road transport, the cost of repair, the cost of the drivers etc and just look at the cost of fuel in the oil tanker.

The average cost of fuel in the tanker from Mombasa to Hoima and back to Mombasa would be in the region of UGX 5,000,000. The cost of road transport for crude oil is therefore seventy one times more expensive than the cost of transport in a pipeline. Why would even a terrible businessman go for the road transport route?

Not only is road transport more expensive it also completely wipes out any chance of profit for the oil company. Remember the oil tanker/trailer is carrying crude oil. The product which is going to be sold is crude oil. The cost of 1 barrel of crude oil is around US$ 59 (Uganda Shillings 218,300). So why would anyone transport cargo worth UGX 218,300 at a cost of UGX 5,000,000? Even a bad business cannot make such a decision.

As a simple issue of cost there is no benefit, not even a remote one from transporting oil by road to Mombasa or Tanga.

Cost is not the only issue. Using trucks to carry crude oil from Hoima would be a logistical nightmare. Many books have been written explaining this very point. Valcalv Smith in his book “Oil: A Beginners Guide” said, “replacing a 1000 km pipeline carrying 20,000 tons of oil a day with tanker trucks (assuming each truck holds 25tons and covers 1,000 km a day) would need a fleet of 1,600 vehicles with a load arriving every 54 seconds.” In our case the coast is 1,455 km away. We would probably need 2,000 trucks to transport Ugandan oil.

It is also worth noting that trucks of a certain weight are not allowed on the road. Long distance travelers in Uganda will have noticed at different points these things manned by UNRA called weigh bridges. The weigh bridge measures the weight of the truck. In this case the 2000 heavy trucks arriving in Hoima every 54 seconds (at all hours of the day) would not last a month since they would simply make a large chunk of the road network impassable.

When the crude oil will eventually be pumped out, it will first be taken to what is called a Central Processing Facility. Here the oil will be separated from other impurities like mud, stones etc. Only crude oil will go to the pipeline. Once in the pipeline it will be heated because Uganda has waxy crude oil that needs heating. So these trucks are they taking Crude Oil, mud, water, stones etc? Or are these trucks fitted with mini Central Processing Facilities? If they are, then Uganda will be the 1st country on earth to have imported them from God knows where (unless we are secretly manufacturing these trucks.)

Even if the trucks would process the crude, it would still need to be heated. One wonders if these magical trucks are also fitted with solar panels.

The whole thing is impractical, not profitable, not possible, not necessary and absurd.

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Engineer Peterson Mwesigwa Is Once Again Overall Best Student at LDC

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By Staff Writer

Peterson Mwesigwa could be the most intelligent Ugandan alive today. He holds a Masters Degree in Electrical and Computer Technology.

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Two years back, he was the first person to get a first class Degree at the Law School after over a decade of only second class degrees.

Now Mwesigwa is also the top student at this year’s graduating platform. He was awarded for topping everyone. He is surely an exceptional achiever.

A man standing at the interesection of the arts and sciences. An Engineer and now a lawyer.

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Andrew Mwenda on Loss of Mother: “I feel Empty and Lost”

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By Staff Writer

It has been a sad week as one of Uganda’s best journalists, Andrew Mwenda laid his mother to rest.

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While eulogizing his mother at All Saints Church, Mwenda described her as the most beautiful chic that ever lived. But one could not help but see the pain in his statements.

At 12 noon, Adyeeri Constance Muhangazima, was laid to rest in the great village of Kanyandahi.

Andrew Mwenda then took to Twitter to express his current pain and depression. He called it the biggest blow ever. He talked of feeling all lost and alone.

We can only pray for the best of comforting to the old man of the clan. Losing a mother is surely the hardest thing that ever happens to anyone in life. There is no hole deeper. It is a hole that cuts through a soul.

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Banzega: How Kisekka Market Mechanics Rob Car Owners; Ring Leader Revealed

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By Staff Writer

Many people in the past have shared nasty tales about their experiences with Kisekka market mechanics.

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BigEye.ug was able to speak to some mechanics who work at Kisekka market who revealed how the car repair scams happen. At Kisekka market, you basically pay for zero repairs on your car.

According to this mechanic, it is a big mistake for one to come by this area without calling up a specific mechanic. “We have cheap, good quality spare parts. But one should know that it usually doesn’t come cheap.”

These mechanics target naive drivers. They will warn you about someone wrong with your tyre and immediately offer a quick 5 minutes fix.

Before long others are taking off other tyres and claiming to be replacing car parts. Afterwards, they will give you a bill while your car has been stripped bare to the rims.

In order to survive, one has to pay or else the car won’t move. In Kisekka market, they call this method: “Banzega and Kusula masasi.”

We were also told that the ring leader is a one Bibi Atiriba; he runs his crime ring together with the nearby police post which takes a share of every bill. The police post will always rule in favour of the mechanics. “That guy has been to every prison in the country. He is feared by everyone. He is like a Kitatta but much more influential. He often brags that only Museveni can order him around,” this insider revealed to us.

“If you want your car to be repaired well, then it is best to just go straight to him. Or else wait to be scammed while in kisekka market.”

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