Publication date: Friday, 31st October, 2008
By Chris Kiwawulo and Moses Nampala
MORE than 100 oil-transporting trucks remained stuck at Malaba border yesterday while Kampala suffered a major fuel shortage.
City motorists were forced into panic buying as some filling stations ran out of fuel for the last two days, causing queues. In some stations, attendants waved ‘move on’ to motorists as they ran out of fuel. Petrol prices shot up from sh2,500 to sh2,800 per litre in a little more than a week.
At the same time, diesel from sh2,380 to sh2,600 while kerosene increased from sh2,250 to sh2,350.
Oil company sources said the shortage and price rise have been caused by delayed clearance of trucks at Malaba border, problems with the oil pipeline in Kenya, panic buying by motorists, hoarding by some companies and the rising dollar exchange rate.
More than 100 oil-transporting trucks remained stuck at Malaba border yesterday, while Kampala suffered fuel shortage.
City motorists were forced into panic-buying as some filling stations ran out of fuel, causing queues. Petrol prices shot up from sh2,500 to 2,800 per litre, while diesel rose from sh2,380 to sh2,600. Kerosene increased from sh2,250 to sh2,350.
Oil company sources said the shortage and price rise have been caused by delayed clearance of trucks at Malaba border, problems with the oil pipeline in Kenya, panic-buying by motorists, hoarding by some companies and the rising dollar exchange rate.
At Malaba, trucks, some of them carrying fuel, formed a long queue stretching for about six miles, waiting to enter Uganda. The hold-up has been attributed to the poor parking yard on the Uganda side and the truck drivers’ strike .
Humar Yusuf, a fuel tank driver, said they spend a long time at the border. “If they allowed many trucks they would have no where to park. The parking yard on the Ugandan side is in bad condition.”
Ricachard Kamau, another driver, said the parking on the Ugandan side is so marshy that their trucks get stuck, so they would rather endure the long queue on the Kenyan side.
The Uganda Petroleum dealers’ chairman, Rajni Tailor, said they had resorted to rationing fuel as a result of the shortage. “Whenever motorists realise a fuel shortage, they rush to fill their tanks. At my stations now, we do not sell more than 20 litres to big cars and more than 10 litres to small ones,” said Rajni, who owns several Total stations in Kampala, disclosed.
Tailor advised the Government work on fuel reserves.“What if a strike takes as long as two weeks with no fuel coming in, what will happen without any reserves?” he asked.
Shell Uganda Chairman Ivan Kyayonka said only petrol stocks were depleted but diesel was still available. Whatever Petrol we receive is consumed. “We have used all the stock we had in the last two weeks.”
Kyayonka said the situation would normalise within three to four days.
According to government statistics, Uganda uses 1.2 million litres of diesel, 543,000 of petrol and 300,000 of jet fuel daily. Of the total amount of diesel used, 560,000 litres are used to generate electric power.
The fuel shortage has been aggravated by failure in the recent attempts to upgrade the Kenyan oil pipeline system. Depreciation in the Uganda shilling not only raised the price, but also affected the companies’ purchasing power.
Kampala City Traders Association spokesperson Issa Ssekitto noted that fuel dealers hoard fuel out of speculation. The dealers, he added, then sell the fuel to selected individuals and make super normal profits.
Ssekitto said the fuel shortage has affected the traders so much that they have increased most of the imported products by at least 20%.
“Fuel price increments have a direct impact on the cost of commodities because of the increase in transport costs that come with it. For the past three days, we have approached several Shell filling stations and they were telling us they have no petrol except diesel,” he revealed.
Energy minister Daudi Migereko said despite the price rise, Government would not intervene to fix prices, which he attributed to “market forces.”
He said the Government policy is to allow prices be fixed by the market but without creating cartels or price collusion. He blamed the exchange rate, transport costs and insurance.
The minister said freight and insurance charges had risen and forced fuel prices up due to piracy on the high seas. “Ships hire more security escorts.”
The Energy Ministry, Migereko said, will continue to monitor the developments to ensure that the oil companies do not take advantage of the consumers.
This article can be found on-line at: http://www.newvision.co.ug/D/8/12/657378
© Copyright 2000-2010 The New Vision. All rights reserved.