The increase in fuel Demand has led to its price increase – Uganda Government


(Annews24- Kampala) Uganda Government has cleared the air about the sky rocketing prices of fuel in the country in the past months.

Last week, Members of Parliament put government on the sword to explain the reason behind the ever increasing petrol prices at a rather unbearable amount but also in the face of a poor population.

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On Tuesday, the Minister of State for Energy,  Simon D’Ujanga in a statement told parliament that the demand for fuel in the past months has increased in the country and has in turn led to increase in the prices.

“Uganda’s consumption of petroleum products  has grown by 9.6%  within the last two years whereby the country now consumes a monthly average  of 174 million litres of fuel compared to last year’s  168 million,”D’Ujanga told parliament on Tuesday.

He explained that of the 174 million litres, 91 percent are imported through Mombasa port and nine percent through Dar Es Salaam port adding that in order to meet the demand, it would depend on the effectiveness of the import routes and the in-country storage facilities.

International fuel prices

The MPs last week asked the Speaker of Parliament Rebecca Kadaga to constitute a parliamentary inquiry into the rising fuel prices adding that government has not done much to protect its citizens from the exorbitant prices.

“Last week, petrol was going for Shs4,100, today it is Shs4,420; meaning that probably by Christmas time, it will be Shs5,000 and by the end of the year, about Shs6,000,”said Kyaka South MP Jackson Kafuuzi.

He said that government ought to come out to protect its citizens from a possibility of racketeering and profiteering by some of the fuel importers.

However, the junior energy minister said that being a landlocked country and a net importer, Uganda depends on a number of factors to determine the fuel price in the country.

He said there are a number of charges involved before the final fuel prices are reached at.

“Pump prices are a function of international prices of crude, refinery gate prices for products and the United States dollar exchange rate against the Ugandan shilling,”D’Ujanga told parliament.

“Pump prices also depend on logistical costs which include port handling fees, transit handling fees, storage fees, transportation fees, clearing and marking fees. The combination of the logistical costs together with the cost of the imported products which increased as a result of increased refinery premiums in the open tender system since July 2018 has resulted in the increased pump prices.”

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The minister said that with a number of measures put in place to ensure a steady supply of petroleum products and fair competition in the sector locally, they would continue monitoring them to ensure fair prices to consumers.