Members of Parliament on the Finance Committee have questioned officials from the Ministry of Finance, Planning, and Economic Development over the skyrocketing fuel prices across the country.
Fuel prices have been rising sharply since early last year but since the beginning of this month, they have risen more sharply by up to shs 1,300 per litre.
Led by the State Minister for Finance (General Duties), Henry Musasizi, officials from the Ministry of Finance on Tuesday appeared before the committee to present the entity’s Budget Framework Paper for the coming financial year 2022/2023.
According to documents presented to the committee, the Ministry requires Shs 15.4 trillion for treasury operations.
The MPs argue that the ongoing fuel crisis would have been averted if Uganda’s oil reserves were full.
Mbale Industrial Division MP, Karim Masaba said that the economy is partially open but the fuel prices are increasing on a daily basis.
“In other places, fuel goes for Shs 6,000 to Shs 7,000, and in Hoima, which is the oil city, things are worse. This is so because the Ministry of Finance has not prioritized filling up its oil reserves and that is why we are now feeling the effect,” he said.
Keefa Kiwanuka, the Finance Committee Chairperson said that one of the officials from Uganda National Oil Company (UNOC ) recently told the Committee that Uganda’s oil reserves are empty.
Kiwanuka also said that refilling the country’s oil reserves could solve the ongoing spike in fuel prices.
Amos Lugoloobi, the Minister of State for Planning told MPs that Government is handling the challenge of fuel in the country that arose from a policy problem to control the spread of Covid-19.
He said that the matter is at the heart of government and was adequately discussed on Monday in Cabinet and that they expect a final position today.
Lugoloobi added that the issue is just a disruption about the entry of trucks from the border, but once those trucks are released and the current policy problem is addressed then fuel will flow.
However, Kilak North MP Anthony Akol wondered whether Government has the capacity to handle the ongoing fuel crisis.
“Our concern is the country’s preparedness to handle a crisis for just a few days. What if the crisis went on for months? Why are we failing to handle the oil reserves so that in the future we do not have such a crisis? Akol questioned.
In response, Lugoloobi said that UNOC plans to construct more oil tanks to reserve oil.
This response raised more queries from MPs who asked why the Government wants to build more oil reserves yet the current reserves are empty.
Butambala County MP, Muwanga Kivumbi then criticized the Finance Ministry for failing to align the country’s priorities.
He questioned why the Ministry failed to adequately budget for the oil sector which is a key game-changer in the economy.
The committee learned that the oil and gas sector is among the unfunded priorities in the financial year 2022/2023 and Finance Ministry is seeking additional funding of shs 48 billion to capitalize UNOC to execute its mandate as an investment arm of government in the oil and gas industry.
Ramathan Ggoobi, the Secretary to Treasury said that they are committed to operationalizing the oil and gas sector but are constrained by a limited resource envelope.
He asked MPs to help the Finance Ministry to repurpose and realign budgetary priorities to ensure that all votes are budgeted in such a way that their activities are achievable.