Government speaks out as fuel prices surge across the country

KAMPALA - For days, motorists across Uganda have been asking the same anxious question at petrol stations, taxi parks, and trading centres: if the country has enough fuel, why are pump prices rising and some stations running dry?

The government now says the answer lies far beyond Uganda’s borders.

Speaking at the Uganda Media Centre on May 22, Permanent Secretary in the Ministry of Energy and Mineral Development, Irene Pauline Bateebe, said Uganda’s fuel market has been caught in the ripple effects of the ongoing conflict in the Middle East, particularly disruptions affecting the Strait of Hormuz, one of the world’s most critical oil shipping routes.

For ordinary Ugandans, the impact has been immediate and painfully familiar: more expensive transport, rising commodity prices, and uncertainty over fuel availability in some towns.

“The East African region has been particularly affected because a substantial proportion of petroleum imports originate from the Arabian Gulf,” Bateebe explained.

Much of the fuel used in Uganda begins its journey in the Middle East before moving through international shipping routes into East Africa. When conflict disrupts those routes, transport costs rise.

Insurance costs rise. Global oil prices rise. Eventually, the increase reaches fuel pumps in Uganda.

That chain reaction is felt throughout the country. The government acknowledged that retail fuel prices have increased in recent weeks, driven by “global supply constraints, increased importation costs, regional demand pressures and exchange rate fluctuations.”

But the situation became more complicated because Uganda, for a period, still had lower pump prices than some neighbouring countries.

That price difference triggered increased cross-border demand, especially in border districts where fuel could be bought in Uganda and moved into neighbouring markets.

The result was abnormal pressure on fuel stocks in towns near the borders, causing temporary shortages at some filling stations.

For drivers in places like Arua, Tororo, and other border areas, the shortages created the impression of a national crisis, but the government insists Uganda has continued to maintain adequate fuel reserves.

“Government and UNOC have since restored supply stability and strengthened ongoing importation arrangements,” Bateebe said.

The Uganda National Oil Company (UNOC), working with international supplier Vitol, has reportedly been sourcing fuel not only from the Gulf region but also from West Africa, Europe, India, and the Americas to avoid dependence on a single supply route.

That diversification matters because Uganda imports all its refined petroleum products. The country is yet to refine its own fuel, making it vulnerable to global market shocks.

The government also stressed that Uganda’s fuel market remains liberalized, which means the state does not directly fix pump prices. Instead, Oil Marketing Companies (OMCs) determine prices based on import costs, transport expenses, taxes, currency movements, and market demand.

Still, officials say they are monitoring the situation closely to prevent exploitation.

“Government continues to closely monitor the market to ensure continuity of supply, discourage smuggling and diversion of products, and protect consumers against exploitative practices,” Bateebe said.

For ordinary households, fuel prices are rarely just about fuel. When diesel prices rise, transport operators often increase fares. Traders spend more time and money moving goods. Food prices can creep upward.

Farmers pay more to transport produce. In many homes, fuel inflation quickly spreads into everyday living costs. That is why even temporary shortages can trigger panic buying.

The government is now urging the public to remain calm and ignore what it describes as misleading information circulating online about widespread fuel scarcity.

“Uganda continues to maintain adequate stock cover and regular product deliveries through both the Kenya and Tanzania supply routes,” Bateebe said.