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Uganda inflation rises as transport, energy costs surge
Nevertheless, inflation for food crops and related items continued to ease during the month. Annual core inflation remained unchanged over the review period at 3.0%, the same rate recorded a month earlier.
The Ministry of Finance Performance of the Economy Report for May 2026 says annual headline inflation increased to 3.2% in May 2026 from 3.0% a month earlier.
By: Umar Kashaka, Journalist @New Vision
KAMPALA - Uganda's inflation rate has increased for the second consecutive month, largely driven by higher transport and energy-related costs following increases in domestic fuel prices.
The Ministry of Finance Performance of the Economy Report for May 2026 says annual headline inflation increased to 3.2% in May 2026 from 3.0% a month earlier.
“The increase was largely driven by higher transport and energy-related costs following increases in domestic fuel prices. These developments arose from the effects of geopolitical tensions in the Middle East, which continued to exert upward pressure on global oil prices by disrupting the fuel supply chain,” states the report.
Consequently, both Annual Energy, Fuel and Utilities (EFU) inflation and Annual Services inflation increased over the review period.
Nevertheless, inflation for food crops and related items continued to ease during the month. Annual core inflation remained unchanged over the review period at 3.0%, the same rate recorded a month earlier.
Lower prices for some consumer goods, including sugar, local gin (waragi), milk, millet flour, and chicken kroiler, helped offset increases in transport services as well as restaurant and accommodation services.
Price declines were more pronounced for sugar, local gin (waragi), milk, millet flour and chicken kroiler, whose annual inflation rates declined by -5.8%, -0.1%, -0.5%, -0.7% and -13.4%, respectively, in May from -3.4%, 3.0%, 0.4%, 2.4% and -5.0% a month earlier.
In contrast, Transport and Hospitality-related services registered stronger price increases during the month, largely reflecting higher operating costs associated with increased fuel prices.
Notable increases were recorded in long-distance taxi fares, short- and medium-distance transport services, special hire services, school transport charges, and hotel and lodging services. EFU increased significantly in May to 9.1% from 6.1% a month earlier.
This was largely driven by higher domestic fuel prices, particularly for petrol, diesel and paraffin, as well as solid fuels such as charcoal. High global crude oil prices, supply-chain disruptions, and elevated freight and insurance costs for petroleum shipments contributed to the increase in domestic fuel prices.
Lower prices for some consumer goods, including sugar, local gin (waragi), milk, millet flour, and chicken kroiler, helped offset increases in transport services as well as restaurant and accommodation services.
Price declines were more pronounced for sugar, local gin (waragi), milk, millet flour and chicken kroiler, whose annual inflation rates declined by -5.8%, -0.1%, -0.5%, -0.7% and -13.4%, respectively, in May from -3.4%, 3.0%, 0.4%, 2.4% and -5.0% a month earlier.
In contrast, Transport and Hospitality-related services registered stronger price increases during the month, largely reflecting higher operating costs associated with increased fuel prices.
Notable increases were recorded in long-distance taxi fares, short- and medium-distance transport services, special hire services, school transport charges, and hotel and lodging services. EFU increased significantly in May to 9.1% from 6.1% a month earlier.
This was largely driven by higher domestic fuel prices, particularly for petrol, diesel and paraffin, as well as solid fuels such as charcoal. High global crude oil prices, supply-chain disruptions, and elevated freight and insurance costs for petroleum shipments contributed to the increase in domestic fuel prices.
As a result, average pump prices increased to sh5,756 per litre for diesel and sh5,940 per litre for petrol in May, compared to sh4,738 per litre and sh5,046 per litre, respectively, in May last year.
The report states that the Government interventions helped moderate the pass-through effect of global fuel price pressures on domestic consumers.
These interventions, it says, included the centralised importation of fuel through the Uganda National Oil Company and continued management of strategic fuel reserves.
“These interventions have helped moderate fuel prices, with Uganda’s pump prices continuing to fare favourably relative to those in other EAC (East African Community) Partner States.”
On the other hand, annual food crop and related items inflation continued on a downward trend over the review period, declining to 0.2% down from 0.6% in April.
“The continued slowdown was largely driven by improved domestic food supply in local markets following favourable weather conditions and bumper harvests over recent months,” says the report.
In particular, food items such as matooke, sweet potatoes, dry beans, fresh beans, pineapples, cucumber, pumpkins and peas recorded further price reductions in May compared to the previous month.
In addition, the rate of increase in prices for some commodities such as cassava, Irish potatoes, green cabbages, and groundnuts moderated compared to previous months.
Headline inflation refers to the rate at which prices of general goods and services in an economy change over a period of time, usually a year, while core inflation is a subcomponent of headline inflation that excludes items subject to volatility in prices.
It excludes energy, fuel, utilities, food crops and related items.
The report states that the Government interventions helped moderate the pass-through effect of global fuel price pressures on domestic consumers.
These interventions, it says, included the centralised importation of fuel through the Uganda National Oil Company and continued management of strategic fuel reserves.
“These interventions have helped moderate fuel prices, with Uganda’s pump prices continuing to fare favourably relative to those in other EAC (East African Community) Partner States.”
On the other hand, annual food crop and related items inflation continued on a downward trend over the review period, declining to 0.2% down from 0.6% in April.
“The continued slowdown was largely driven by improved domestic food supply in local markets following favourable weather conditions and bumper harvests over recent months,” says the report.
In particular, food items such as matooke, sweet potatoes, dry beans, fresh beans, pineapples, cucumber, pumpkins and peas recorded further price reductions in May compared to the previous month.
In addition, the rate of increase in prices for some commodities such as cassava, Irish potatoes, green cabbages, and groundnuts moderated compared to previous months.
Headline inflation refers to the rate at which prices of general goods and services in an economy change over a period of time, usually a year, while core inflation is a subcomponent of headline inflation that excludes items subject to volatility in prices.
It excludes energy, fuel, utilities, food crops and related items.