Fuel prices unchanged despite global fall

By Edward Kayiwa

Fuel prices in Uganda remained largely unchanged despite the tumbling of oil prices internationally.

International prices have been plummeting for several months to trade at about $60 (about sh166,200) a barrel, down from $115 (about sh318,550) in June 2014.

“Some fuel stations are selling a litre of petrol at sh3, 770, while others are selling at sh3,750, yet we all know that prices have fallen globally,” said Ben Musaala, a taxi driver in Kamwokya, a Kampala Suburb.

Musaala faulted institutional and regulatory weaknesses in the Government for the current challenge, saying several players have taken advantage to hike prices even when they buy it cheaply.

However, the commissioner for petroleum supply in the Ministry of Energy, Rev. Frank Tukwasibwe, dismissed the concerns, saying the drop in international prices is only for crude oil and not its products.

“Uganda does not import crude oil, but its products. We all know that the reduction in prices is basically for crude oil, which does not necessarily translate into reduced prices for oil products such as petroleum and diesel at the pump.

“There are a lot of cost dynamics involved in the purification process which push the price a little up,” he said.

He did not explain. But Vivo Energy (Shell) boss, Hans Paulsen, attributed the persistently high fuel prices despite the falling crude prices internationally to the weakened shilling.

“However, we should expect prices to go down because there is a slight reduction in the operating costs,” he said.

“OPEC failed to reach a consensus on production curbs was inevitable that global oil prices would fall. And because it is considerably cheaper to purchase a barrel of oil on the global market, the difference has to be reflected in consumer prices at home as well,” said Paulsen.

He explained that the relaxed demand for oil on the world market has created a surplus in oil supply coupled with the geopolitical upsets in North Africa, especially Libya, sanctions on Russia and the Ebola outbreak in West Africa.