Restore diesel subsidy - UMA
May 12, 2009
THE Government should restore the diesel subsidy for industrial generators until power supply is sustainable, the Uganda Manufacturers Association (UMA) has said.
By David Muwanga
THE Government should restore the diesel subsidy for industrial generators until power supply is sustainable, the Uganda Manufacturers Association (UMA) has said.
In their contribution to the 2009/2010 budget proposals, they said although power supply had improved, there were rampant power fluctuations that had led to loss of goods and property.
“The demand has surpassed supply thus leading to poor quality power supply,†they argued. The producers said pharmaceutical, plastics and textile firms had incurred great losses due to inconsistent power.
“The cost of power is still high compared to other countries. This has made our products uncompetitive in the region,†they added.
They said fuel shortages continued to affect them although international prices fell below $40 a barrel at one point.
“The diesel subsidy should be reinstated and all industries allowed to acquire higher kilo volts amps (KVA) to reduce production costs. Power tariffs should also be reduced to encourage compliance,†they argued.
They said transport costs increased greatly between 2005 to 2008. “For example, in 2005, the cost of transporting 15 tonnes by road from Mombasa to Kampala was $1,300 (about sh2.9m - current rates), but it rose to $2,500 (sh5.6m) in 2008 for 12.5 tonnes.
“The transport tonnage has reduced, but the cost has increased,†they pointed out. “The railway system is down with only 762 out of 1,244km operational,†they added.
The producers also said the poor internal transport infrastructure had made it difficult for them to get raw materials and distribute their goods.
“The Government should invest money in a modern railway network and buy more ferries for the Dar es Salaam-Mwanza-Portbell route.â€
The manufacturers also asked Kenya Ports Authority to provide space for stripping of Uganda-bound cargo. .
THE Government should restore the diesel subsidy for industrial generators until power supply is sustainable, the Uganda Manufacturers Association (UMA) has said.
In their contribution to the 2009/2010 budget proposals, they said although power supply had improved, there were rampant power fluctuations that had led to loss of goods and property.
“The demand has surpassed supply thus leading to poor quality power supply,†they argued. The producers said pharmaceutical, plastics and textile firms had incurred great losses due to inconsistent power.
“The cost of power is still high compared to other countries. This has made our products uncompetitive in the region,†they added.
They said fuel shortages continued to affect them although international prices fell below $40 a barrel at one point.
“The diesel subsidy should be reinstated and all industries allowed to acquire higher kilo volts amps (KVA) to reduce production costs. Power tariffs should also be reduced to encourage compliance,†they argued.
They said transport costs increased greatly between 2005 to 2008. “For example, in 2005, the cost of transporting 15 tonnes by road from Mombasa to Kampala was $1,300 (about sh2.9m - current rates), but it rose to $2,500 (sh5.6m) in 2008 for 12.5 tonnes.
“The transport tonnage has reduced, but the cost has increased,†they pointed out. “The railway system is down with only 762 out of 1,244km operational,†they added.
The producers also said the poor internal transport infrastructure had made it difficult for them to get raw materials and distribute their goods.
“The Government should invest money in a modern railway network and buy more ferries for the Dar es Salaam-Mwanza-Portbell route.â€
The manufacturers also asked Kenya Ports Authority to provide space for stripping of Uganda-bound cargo. .