KAMPALA - Fuel prices have gone up in the past few weeks amid reports of increasing world oil prices and the depreciation of the shilling against the dollar.
A visit to various petrol stations, mostly in Kampala and Wakiso districts, showed that the price of petrol has gone up to sh3,800 per litre and diesel up to sh3,280 per litre. This increase has been noticed at filling stations such as Total Wampewo in the city centre.
However, fuel prices are not uniform as other filling stations such as Shell Lugogo are selling petrol at sh3,790 and diesel at sh3,270 per litre.
Outside the city centre, most Shell and Total filling stations were selling petrol at between sh3,660 and sh3,670 per litre and diesel at between sh3,120 and sh3250. A few small filling stations were selling petrol at sh3,600 and diesel at sh3,100.
At the close of the year 2017, petrol prices were ranging between sh3,350 and sh3,600 per litre and diesel was ranged between sh3,070 and sh3,100 per litre at most petrol stations in and around Kampala.
Some observers have attributed the rise in the pump prices to the appreciation of the dollar against the shilling. The dollar is steadily gaining against the shilling at sh3,652/sh3,672 buying and selling respectively.
Although the dollar was relatively up for the last half of 2017, trading at between sh3,610 buying and sh3,640 selling, fuel prices had remained relatively stable.
Others have argued that the rising world oil prices are also to blame for the rising local pump prices. Global crude oil prices, which had dropped to as low as $37 a barrel in December 2015, are this week heading towards $70 a barrel. Between 2016 and 2017, world oil prices had never gone above $50 a barrel.
Iran’s oil minister, Bijan Namdar Zanganeh, last week noted that oil prices had gone up because of production cuts and increased demand for petroleum products, especially in Europe, due to cold weather.
Iran is a key member of the Organisation of Petroleum Exporting Countries (OPEC).
A Shell petrol station manager at a filling station along Bombo Road, who preferred anonymity said the prices had gone up mainly because the dollar was gaining more ground against the shilling of late.
“But there are also other factors such as the rising world prices, which cannot be overlooked. When world prices go up, the trickle-down effect is usually felt locally. At the end of it all, it is the motorists who have to pay because we have to remain in business,” he explained.
Godfrey Zinga, a truck driver operating in Kampala, said an increase in fuel prices affects their operations a great deal.
“It is difficult for us to convince our customers who are used to paying a certain amount of money for transporting merchandise that fuel prices have increased and, therefore, the charges have to go up as well. In some cases, we end up making losses to retain our customers,” he observed.
Rajni Tailor, the national fuel dealers’ chairman, attributed the rise in local pump prices to the appreciation of the dollar against the shilling and the increasing world oil prices.
“Obviously, when any of those two factors comes into play, fuel prices have to go up and there is nothing the local dealers can do about it,” he explained.