Uganda: Govt Attributes Fuel Prices to Global Costs, Taxes, Shilling Depreciation

What the report says

Uganda’s government has told Parliament that recent fuel price increases are being driven by several cost pressures rather than a single factor. Energy Minister Monica Musenero said on Wednesday in Kampala that higher international petroleum prices, the weaker Uganda shilling, taxes, freight, insurance and other logistics expenses have all added to pump prices. She said the exchange-rate movement in early September translated into a meaningful added cost per litre, and pointed to the 2026/2027 excise duty increase on petrol and diesel as another contributor.

Musenero also said Uganda operates a liberalised petroleum market, so the ministry does not set a uniform retail price. According to her statement, prices vary depending on import costs, procurement terms, transport, financing and company margins. She cited market checks showing higher prices in Moroto than in Kampala, while warning that transport costs should not be used to justify excessive mark-ups. She said the Petroleum Supply Department is monitoring prices and engaging companies where anomalies appear.

The minister added that current national fuel stocks remain adequate, even though global markets are under pressure from disruptions in the Middle East and tighter refined-product supplies. She said government is working with the Uganda National Oil Company, exploring supply routes through Kenya and Tanzania, and expanding storage infrastructure to improve resilience and lower distribution costs.

Members of Parliament pressed for relief measures, including temporary tax cuts and stronger preparation for possible regional supply disruptions. Some lawmakers argued that the tax increase should be suspended, while government officials stressed that Uganda’s problem is primarily price pressure, not a fuel shortage.