Govt defends fuel companies over increase in fuel prices

fuel prices

The Ministry of Energy and Mineral Development has defended petroleum distribution companies in Uganda against accusations that they are overcharging motorists for fuel products.

The ministry said that it is still convinced that the fuel product distributors are well within acceptable margins, but that the sky-rocketing consumer prices are mainly due to the increase in global crude oil prices.

Fuel prices in Uganda have in recent weeks risen by more than 500 shillings per litter, with petrol seeing the highest increases to sell at 4,400 shillings a liter.

The companies have attributed this to the high global crude prices which have gone from about zero to 80 US Dollars a barrel in less than two years.

Crude was first affected by a decline in demand in early 2020 when the global economy came to a standstill and prices collapsed. Later production also was affected by the lockdown countries instituted against the pandemic.

As the economies reopened this year, the demand also increased and reports show that China, the second-largest economy is further stepping up demand for oil to feed its manufacturing and automobile industries.

This has seen the prices of finished products go up around the globe including Uganda and East Africa. The ministry says that the petroleum prices in Uganda are still within the reserve prices that the government set. And there is no proof that any marketer in Uganda has violated the reserve price, which the government keeps secret from the public.

Solomon Muyita, the spokesperson ministry of energy says that even though Uganda maintains a free market economy policy, they have control over how far the prices can rise.

He has also said that the disruption of production due to COVID-19 has also led to the increase in crude oil. He adds that probably next month.

However, on the global scene, the ministry thinks that oil majors are facing pressure to increase prices and meet their investments and costs of production because of the demand.

Assistant Eng. Energy Efficiency, David Birimuye has said that car manufacturing companies have a move for the world to start using electric cars from fuel-based cars.

The State Minister for Energy, Okaasai Opolot says the government is regulating the price levels to match the global trend and that with the increase in fuel prices the private sector is not doing it without government knowledge.

Minister Okaasai also said that the increase in the fuel prices is not in Uganda alone it’s the same case in all the East African countries and Uganda is even slightly lower than some countries in the region.

He adds that the government has got reserves where they can keep the fuel that can run the country for a whole month and that the increase in the fuel prices is not intended by the private sector.

However, motorists are feeling the pinch and have devised different means of coping with the situation, yet those in the motor transport business are counting losses.

Quincy Mugisha driving a Subaru, “My expenses increased from shillings 160,000 to shillings 190,000 full tanks, and this means a lot to my livelihood as I forego some necessities for the sake of fuel.”

Another motorist only identified as joy says this has restricted her operations through limited movement and a decreased expenditure on some essentials.

Abdul Nasser Mawa a taxi driver at Kampala- Wakiso stage, his fuel expenses have jumped from between shillings 120,000-140,000 to between shilling 140,000- 150,000 which decreases his income.

Michael Kato a boda-boda cyclist says passengers refuse to add on the transport fare, and a liter which used to make at least shillings 10000, now makes shillings 7000.

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