Fuel pump prices start to drop

By Chris Kiwawulo        

Fuel pump prices have started dropping as the shilling continues to gain more ground against the dollar. Oil experts are predicting more reductions in pump prices in the near future.

The reductions of as high as sh300 on petrol and sh250 on diesel have been noticed in and around Kampala. Although the prices were not uniform, competition from stations selling at reduced prices forced other industry players to make reductions.

By Tuesday afternoon, petrol prices had dropped to sh3,650 down from sh3,950 as of late last year. 

Diesel had reduced from sh3,650 to sh3,450. 

These price reductions were noticed at some Gapco, Mo Petrol, and Gaz filling stations in and around town and along Gayaza and Bombo roads. 

A few Shell and Total stations had also reduced petrol prices to sh3,750 and diesel to sh3,500. 

Kerosene remained unchanged at sh2,950 at most filling stations.

Kobil Uganda operations and marketing manager, Peter Ochieng, said the appreciation of the shilling and the improved availability of the oil products in the western part of Kenya were the biggest factors behind the price reductions.

The shilling yesterday afternoon traded at sh2,408/18 buying and selling respectively against the dollar.

The dollar, a very big factor in determining local pump prices, had traded as low as 2,901 in September.

“Between November and December last year, there was scarcity of oil because we would collect it from Mombasa. 

“But now, we get it from Eldoret and Kisumu in western Kenya, which reduces on the transport costs and therefore local pump prices,” Ochieng explained. 

Oil experts said given the current trend, the local pump prices were likely to drop further. 

The experts said if the dollar continues appreciating and the supply remains steady the prices are not likely to change even if international prices rise. 

In December, crude oil prices were around $96.20 per barrel, but they were at 100.68 by yesterday afternoon.

Daniel Segal, a private oil consultant and former Kobil Uganda boss, also attributed the drop in local pump prices to the appreciation of the shilling. 

He said international prices had also played a role because they were still low.