Uganda Fuel prices inch higher, cap unlikely
Thursday, 8th September, 2011
Uganda fuel prices continue to go up, reaching sh3,934 in the upscale areas of Kampala due to fluctuations in the value of the Uganda shilling, industry insiders say.
A survey reveals that fuel prices are uneven ranging from sh3,780 to sh3,900 for a litre of petrol in the city centre with diesel firmly pegged at sh3,500 at most stations.
Rajni Tailor, the chairman of Uganda Petrol Dealers said the value of the shilling is greatly fluctuating against the dollar making pump prices unpredictable.
“Most fuel dealers are charging an additional margin on the pump prices of fuel to cater for the losses that occur when the shilling to dollar exchange rate fluctuates,” he explained.
The shilling was trading at sh2,809.78/2,819.75 against the dollar, buying and selling yesterday afternoon at most commercial banks having fallen from sh2,803.26/2,813.31in the morning.
Tailor pointed out that despite the sh850 tax levy on petrol, sh530 on diesel and sh200 on kerosene imports remaining fixed, additional interventions are needed to calm the pump fuel prices.
“Hoarding cannot be ruled out, the way it was done in the early 1970’s. An investigation should be done and whoever is guilty brought to book,” he said.
Pump prices for petrol, diesel and Kerosene in Tanzania are being fixed by the government through its implementing agency, the Energy and Water Utilities Regulatory Authority (EWURA).
The agency lowered the pump price of petrol in the commercial capital Dar es Salaam by 2.11% to Tsh2, 070 (Ush3,583), diesel by 1.57 % to Tsh1,999 (Ush 3,459) and kerosene by 1.28% to Tsh1,980 (Ush3,427) in line with a new fuel price calculation formulae.
Media reports indicate that the formula considers the value of the country’s currency and the international fuel product prices to determine the pump prices.
A barrel of Brent crude oil is currently going for $111.64 (sh313,708) from $76.96 (sh216,241) in May this year.
Raymond Agaba, the commissioner for internal trade in the Ministry of Trade and Industry said in a telephone interview from Arusha that such a move is unlikely in the near future in Uganda.
“The policies in Tanzania are different from those in Uganda. We have fully liberalised the economy and therefore the government cannot dictate the pump prices of fuel,” he explained.
“In the distant future when East Africa is fully integrated, the possibility could be there,” he added.
A litre of petrol is currently going at Rwf1025 (about sh4,818) same as diesel in Rwanda while Kenya the price of petrol is at Ksh117.22 (Ush3,540) and diesel at Ksh108.97 (Ush3,290).
By Samuel Sanya: The New Vision Newspaper