By our reporter
The government of Uganda under the ministry of Energy and Mineral Development has come out and issued a statement explaining the current high prices for petroleum products.
According to a statement by Irene Muloni, the Energy minister, the increase in fuel pump prices is due to interplay of the rise in crude prices and refinery premiums on the global market.
“Uganda is a net importer of petroleum products in a liberalized downstream petroleum market and the prices in Uganda are purely determined by forces of demand and supply,” Muloni states.
The statement indicates that there has been a sharp increase in crude oil products on the global market from US$52.2 in August 2017 to US$62.89 in December 2017 to finally a hooping $69.45 in January 2018 which explains the increase in petrol and diesel prices in Uganda and the rest of E. Africa countries.
Fuel prices have been on the increase since September 2017 from Shs.3,378 for petrol and Shs.2,940 for Diesel in September to Shs.3,900 and Shs.3,250 respectively registered on 18th January 2018.
Compared to other East African countries, the prices in Uganda are lower than those in Rwanda but slightly higher than Kenya and Tanzania.
As of 5th February 2018, petrol and diesel prices in (when converted to Ugandan shillings) Kenya (Nairobi), Tanzania, Rwanda and Uganda stood as such; Shs.3,405 and 2,990, Shs.3532 and 3289, Shs.4702 and 4635 and finally Shs.3860 and 3250 respectively.
The rise in crude oil prices is explained by the huge storm in Unite States that led to the shutdown of production sites and refineries in US Gulf coast.
Muloni further said that Uganda continues to enjoy stable import and flow of petroleum products and still has enough in the Country’s reserve refineries. However she notes that the fuel prices will continue to respond to forces of demand and supply in a free market economy.
“Other factors like taxes, transport, handling costs have been constant so the only reason for the high prices is the interplay of the rise in crude prices and refinery premiums (since we import refined products only),” Muloni stated.
However she noted that the ministry will continue to monitor the sub-sector and engage the oil marketing companies to ensure that citizens continue to get value for money from consumption of petroleum products.
The statement comes days after the Central Mp Muhammad Nsereko raised concerns over the increasing prices of diesel and petrol in the country and parliament tasked The Ministry of Energy to make a comprehensive response.
Figures from the ministry show that Uganda’s consumption of petroleum products has continued to grow at 7% per year and on daily basis, the country consumes an average of 2.7million litres of each product of petrol and diesel.