5 January 2008

Uganda: Fuel Prices Remain High, Petrol Still Scarce

Kampala — Fuel pump prices remained high yesterday even after an estimated 36 fuel tanks arrived in Kampala on Thursday evening. Fuel stations in and around Kampala were still selling a litre of petrol fuel at Shs6,000 up from Shs2,300 a week ago.

Fuel was also being sold on the black market, especially in the areas of Kisenyi and Bunga at as high as Shs10,000 per litre after some dealers hoarded the little available fuel to make abnormal profits. Fuel station owners attributed the rising cost of fuel to the shortage in supply and the alleged high transport costs. The Country Manager of Shell Uganda Limited, Mr Ivan Kyayonka, said the consumers should report any dealer who charges prices that are different from what is displayed on the boards.

He said they suspended one of their dealers on Thursday after finding out that he was over charging customers. Energy Minister Daudi Migereko said the fuel which has so far entered the country cannot address the current crisis and meet the high demand.

"We must get fuel all the time. What we have received so far is too little to address the shortage," Mr Migereko said yesterday on phone.He, however, said another convoy of about 80 fuel trucks from Nakuru and Eldoret were on their way to Uganda.

"We need a continuous flow of fuel to be able to make a difference, but the good news is that the fuel trucks have started coming to Uganda," he said.

A total of 36 out of 155 trucks that had been stuck in Kenya following the post election violence arrived in the country on Thursday. Mr Migereko urged the public to bear with the situation as the government tries to ensure that adequate quantities of fuel are brought into the country.

Uganda uses 1.2 million litres of diesel, 543,000 litres of petrol and 300,000 litres of jet fuel daily and about 560,000 litres of fuel is used to generate power. He said Uganda has not been getting adequate supply of petroleum products for over a year now.

He said between February and June last year, many of the activities were affected because the refinery in Mombasa was breaking down every now and then. Mr Migereko said the pipeline which supplies petroleum products from Mombasa to Nairobi, Eldoret to Kisumu where Uganda is supposed to pick the products was faulty and that Uganda couldn't get adequate and regular supplies.

"Prior to Christmas, we tried what we could to get oil companies to deliver as much products as they could, however, at that time, there was a shortage of petrol in the East African region. We managed to bring in reasonable quantities of diesel which has kept us going but petrol is still scarce at all petrol stations," Mr Migereko said.

On the issue of increasing fuel prices, Mr Migereko said the government is working with fuel companies to take action against fraudulent dealers.

Mr Kyayonka said oil companies have started using alternative routes like Mwanza in Tanzania to transport petroleum products into the country and that the situation would slowly normalise. About 50 oil companies operate in Uganda.

He said Shell and other companies are experiencing a shortage of Petrol but still have some diesel and that they are distributing it with a bit of control.

"We are not pouring it as we normally do. We are in business to make money and we would like to sell the products but because of the situation, we need to also recognise the sustainability of the economy,' he said.

The Managing Director of Total Uganda, Mr Christopher Jacquet said every body is doing his best to find solutions to the current crisis. "We are working on the Tanzanian route to bring in more fuel," Mr Jacquet said.

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