Despite the result, BUL have stayed top with 32 points and will return against Mbarara City FC in their next match on Saturday.
Uganda Premier League leaders BUL FC suffered a slump in their race to the title after being beaten by Gaddafi FC in Jinja on Wednesday.
Goals from Frank Mulimi and Ronald Bithum handed the Army side victory at the expense of the Oil Manufacturers.
The latter's only consolation through substitute and forward Gerald Ogweti.
BUL should have been ahead as early as the fifth minute, but Joel Madondo was denied from a spot-kick after a foul.
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And, even though they lost, Obua is convinced his side is on the perfect trail that he won't interrupt for short-term results.
Six minutes later, Gaddafi then broke the deadlock against the run of play with Mulimi striking past goalkeeper Joel Mutakubwa.
At the half-hour mark, the hosts added a second through another well-taken strike, this time from Bithum past Mutakubwa.
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"It was good to have a natural replacement (for Ryan Flynn) and came on had minutes and played well. But it was a tough one for him to come into," the tactician added.
After a long period of pressure, BUL pulled one back after 58 minutes, to give them a lifeline, but couldn't complete a comeback.
Despite the result, BUL have stayed top with 32 points and will return against Mbarara City FC in their next match on Saturday.
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Mugabi, who is in his fifth season at Motherwell, has managed 19 league appearances this campaign, six more than he managed in the entirety of the previous one.
On the same day, 12th placed Gaddafi (16 points) will visit Express FC for their final game of the first round.
Elsewhere, the latter edged Arua Hill SC 1-0 at the Paridi Stadium, Adjumani for Alex Isabirye's third successive win.