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New fuel tax will double food prices

By Vision Reporter

Added 1st July 2007 03:00 AM

THE fuel tax introduced in the 2007/08 budget will push up the cost of goods and services, the Uganda Bureau of Statistics (UBOS) has warned.

THE fuel tax introduced in the 2007/08 budget will push up the cost of goods and services, the Uganda Bureau of Statistics (UBOS) has warned.

By Alice Kiingi

THE fuel tax introduced in the 2007/08 budget will push up the cost of goods and services, the Uganda Bureau of Statistics (UBOS) has warned.

According to the latest monthly Consumer Price Index (CPI), the annual headline inflation rate for June surged to 4.3% from 4.2% in May.

Headline inflation is based on relative changes in prices of all goods and services, while the CPI measures the changing fixed basket of goods and services consumed by households.
“We have been experiencing a continuous rise in inflation since the previous month.

“In the next few months, we could experience a rise in inflation due to the introduction of fuel tax which will increase the cost of production that will affect the consumers hence a double rise in commodity prices,” Vincent Musoke, the UBOS principal statistician, said.

The CPI report largely attributed the rise in inflation to high prices of sugar, milk, meat and poultry, washing soap, taxi and bus fares, fruits and vegetable in the past two months.

“The 1% increase between May and June is of great concern as the diesel shortage had not yet stabilised. This affected the prices across the index,” explained Musoke.

However, rate is lower than the 7.2% registered in June last year.
“This means that consumers are spending more to purchase the same amount of goods they consumed in the same period last year,” Musoke explained.

“Prices of staple foods especially matooke, Irish potatoes, fresh cassava, passion fruits, pineapples, charcoal and vegetables dipped in almost all centres due to increased supplies,” he added.

Musoke attributed this to good rains in June, which ensured sufficient supplies.
“Farmers do not have good storage facilities.

“Therefore, these products had to be sold off immediately at low prices,” he noted.

Kampala, Mbarara, Mbale and Masaka registered the lowest food prices in June, while Gulu had the highest, the CPI indicated.

New fuel tax will double food prices

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