Global diesel crisis adds to Uganda’s fuel price pressures

What the report says

Uganda is facing renewed pressure on fuel prices as global diesel supplies tighten, the shilling weakens and domestic taxes rise, according to The Observer. The report said Energy Minister Monica Musenero told parliament that pump prices had climbed to about Shs 6,800 to Shs 7,000 per litre, with imported fuel costs affected by international market disruptions, exchange-rate losses and higher excise duty.

The article said the International Energy Agency has urged governments to speed up emergency oil stock releases to help ease strain in global markets, especially for diesel. It linked the market stress to disruptions in the Strait of Hormuz and lower Russian supply after attacks on oil refineries in Ukraine. The IEA also said member countries still hold sizeable emergency reserves, though any effect on prices in Uganda would depend on shipping, procurement, currency movement and other local costs.

Musenero told lawmakers that Uganda’s fuel stocks were sufficient to meet demand, but said the government had limited control over pump prices in a liberalised market where oil marketing companies set retail prices. She said the depreciation of the shilling had added roughly Shs 300 per litre in costs, and pointed to a July tax increase of Shs 200 per litre on petrol and diesel.

The government is exploring alternative supply routes through Tanzania and discussions with Kenya, while also seeking to improve storage and logistics. MPs pressed for more detail on UNOC’s pricing arrangements and some called for tax relief, but debate was deferred pending a wider government statement on the economy.