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Uganda: Govt to Sue Fuel Stations Over Prices
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The Monitor (Kampala)
6 January 2008
Posted to the web 6 January 2008
Jane Nafula & Agencies
Kampala
AS the biting fuel crisis precipitated by the political impasse in Kenya entered its fifth day, a government minister warned on Friday that speculators who have exploited the situation to charge extortionate rates will be dragged to court.
Energy Minister Daudi Migereko told Sunday Monitor in an exclusive interview that the government is quietly working with some oil companies to identify fraudulent filling stations.
"We have heard a number of issues regarding prices being charged by different petrol stations," he said. "We are working with oil companies to ensure that people pay the prices displayed on the boards.
We shall not hesitate to take legal action against petrol stations that charge prices that are different from what is displayed on the boards at filling stations because it is illegal to do that."
Uganda has for the last one week been experiencing an acute fuel crisis following post-election violence in Kenya that made it difficult for Uganda to transport her fuel through that coastal country.
Only 36 out of the 155 trucks that were en route have entered Uganda in recent days but Minister Migereko said that another convoy of about 80 fuel trucks from Nakuru and Eldoret were on their way.
The minister said that Uganda will need a continuous follow of fuel into the country before the current stock-out can be brought under control.
Uganda uses 1.2 million litres of diesel, 543,000 litres of petrol and 300,000 litres of jet fuel daily. About 560,000 litres of fuel is used to generate electric power.
A litre of petrol which was previously being sold at Shs2,300 was increased to Shs10,000 while diesel shot up from Shs2,222 to Shs5,000.
The government and some major oil companies including TOTAL and Shell have condemned extortionists and suspended some of their retailers but this has not stopped other dealers from overcharging customers.
Whereas some filling stations have chosen not to display prices on the boards, those that have done so actually ask for prices triple what is displayed once one gets to the pump.
A consumer who went to fuel his car at one of the filling stations on Entebbe Road told Sunday Monitor on Saturday that he was shocked when he found no prices displayed at this station.
After fuelling the car, a pump attendant charged him Shs6,000 per litre.
On Friday, a scuffle erupted between motorists and the managers of Delta filling station in Ntinda when the former were told to pay Shs6,000 per litre of petrol. When motorists resisted, one of the managers asked them to pays Shs4,000 but they still resisted resulting in the scuffle.
The motorists insisted that they were going to pay usual price of Shs2,300. Mr Migereko acknowledges that petrol is scarce but warns that customers should not be exploited.
He said Uganda has not been getting adequate supply of petroleum products for nearly a year now. He said between February and June last year, the refinery in Mombasa broke down every now and then.
He also said that the pipeline which supplies petroleum products from Mombasa to Nairobi, Eldoret to Kisumu where Uganda is supposed to pick the products was faulty.
Said Minister Migereko: "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."
He said the available diesel is being managed very judiciously.
Most filling stations have diesel but lack petrol.
The Managing Director of Shell Uganda, who doubles as the chairman of the Association of Petroleum Companies, Ivan Kyayonka, said the public should insist on paying the prices that are posted on the boards.
"If someone posts Shs2,000 and charges Shs6,000, that is unacceptable. This is cheating consumers," Mr Kyayonka said.
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He said the prices posted by Shell, for example, are based on the world prices today and that it would be unfair for it to change them due to scarcity. "It is not logical to price fuel on the basis of scarcity," Mr Kyayonka said.
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