Economists are warning that the world's faltering recovery from global recession is now at risk.
If oil prices don't drop soon, Ugandans can soon expect another round of fuel price increases. This will increase the cost of living and spur inflation.
There is only one reason for the jump in the price of oil - the very aggressive policy adopted by the Sharon government towards the Palestinian Authority.
Oil traders are nervous that the Middle East conflict may escalate and disrupt supplies of oil. Some OPEC countries are already threatening an oil embargo unless the Sharon government is reined in. This raises the spectre of oil prices going back over $40 per barrel as they did in the early 1970s.
The whole world economy is therefore at the risk of sliding back into even deeper recession because the Sharon government does not want to do a deal with the Palestinians.
It is true that some Palestinian militants are also bitterly opposed to any kind of peace deal with Israel and are probably rejoicing at the escalating crisis on the West Bank.
But the fact remains that in the 18 months that Ariel Sharon has been in power he has systematically done his best to destroy the peace deal with the Palestinians. He has been the architect of the present security breakdown.
The United Nation Security Council last week called for an Israeli withdrawal from Palestinian territory. Sharon has ignored that call and instead occupied every town in the West Bank.
It is time for the United Nations and European Union to consider targeted sanctions against Israel.