Govt rules out fuel price controls despite nationwide surge

_________________

The government will not intervene to fix fuel prices despite growing public outcry over rising costs.

Finance ministry permanent secretary and Secretary to the Treasury Ramathan Ggoobi confirmed that market forces, rather than government mandates, remain the most effective way to stabilise supply and pricing.

Weighing in on the rapid increase in fuel prices, he argued that attempting to regulate pump prices would cause a “distortion” of the broader economy, as fuel remains a central driver of transport and food costs.

“Fuel drives transport and food prices. Distorting it distorts the whole economy,” Ggoobi stated in a short message on X on April 25, 2026.

He maintained that the solution lies in maintaining macroeconomic stability, optimising supply chains through the Uganda National Oil Company (UNOC) and fostering healthy competition among dealers.

Responding to allegations that some dealers are hoarding supplies to artificially inflate prices, Ggoobi dismissed the need for direct intervention.

“Markets keep fuel flowing; controls create shortages,” he said. “Those who try to profiteer don’t last. Competition will correct them sooner or later, and many businesses may collapse as the crisis settles.”

A growing crisis

The Treasury’s stance comes as petrol prices have surged from an average of sh5,000 last month to as high as sh9,000 per litre in some regions. A nationwide survey by New Vision earlier this week revealed that West Nile and border districts such as Arua are the hardest hit, with scarcity fuelling a volatile black market and driving up the cost of essential commodities.

The surge has sparked intense debate online, with critics such as Prof. Jamil Mujuzi pointing to countries like South Africa that regulate prices monthly to provide predictability.

Mujuzi argued on X that the state must intervene when markets fail, warning that uncontrolled prices could lead to political instability.

Supply outlook

The Ministry of Energy and Mineral Development has attributed the current volatility to geopolitical tensions involving Iran, Israel and the United States, which have disrupted global oil shipments.

Despite visible shortages at retail stations, a joint statement from the Ministry and UNOC indicated that national reserves remain functional.

As of April 20, 2026, the country held 70.5 million litres of petrol, providing 19 days of cover, alongside 43.2 million litres of diesel, representing 12 days and 32 million litres of jet fuel, providing 53 days of cover.

To reinforce these stocks, the government expects a major replenishment via Tanzania by May 1, 2026. This shipment will include 183 million litres of petrol and 258 million litres of diesel, which officials say will provide an additional 49 and 74 days of cover, respectively.

Dr Patricia Litho, assistant commissioner for communications at the energy ministry, explained that stockouts at specific stations are largely due to logistical challenges affecting individual marketing companies rather than a national depletion.

Addressing the extreme price spikes in border towns such as Tororo and Arua, Litho attributed the trend to “natural circumstances of increased cross-border demand,” where neighbouring countries draw from Ugandan supplies, further tightening the local market.

What business leaders say

Ezra Muhumuza, executive director of the Uganda Manufacturers Association, said the manufacturing sector is under particular strain, noting that about 95 percent of Uganda’s industrial output depends on petrochemical-based inputs.

He cited products such as plastics, paints, fertilisers and mattresses as heavily exposed to global supply disruptions, with supply chains from countries like India and Thailand already affected.

He described the situation as a “triple tragedy,” where manufacturers face raw material shortages, rising production costs and shrinking export opportunities due to disrupted shipping routes.

He said the long-term solution lies in strengthening domestic capacity, particularly by expanding local oil production to reduce exposure to external shocks.

John Kakungulu Walugembe, the executive director of the Uganda Small and Medium Enterprises, observed that small and medium enterprises are already feeling the strain, particularly in accessing inputs and exporting goods, developments he warned could slow economic growth.

“Once it affects business, then it affects the government's ability to collect taxes,” he added.