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Uganda: Diesel Shortage Hits Kampala
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New Vision (Kampala)
25 April 2008
Posted to the web 28 April 2008
Kampala
The fuel shortage in the country has worsened with several filling stations completely running out of diesel.
At majority of the fuel stations in Kampala, pump attendants were yesterday waving away motorists who would turn up for diesel.
Several Total filling stations scrapped the display price for diesel to signal that "the product is out of stock", a survey by The New Vision found out.
The price of diesel has shot up further and is now selling like petrol at sh2500. Early this week, diesel had increased to sh2400.
Early this month, however, the price of diesel was sh2,100 while petrol was selling at sh2,560. Kerosene was at sh1900 but has also since risen to sh2000.
Fuel dealers attributed the diesel shortage to the low supply and rising world oil prices. Petrol and kerosene stocks, however, remain sufficient.
Kobil Uganda spokesperson Hannington Mpiima said: "Kenya and Tanzania have not had enough fuel for export to Uganda for the last two weeks due to delays in cargo."
Mpiima said the supply problem is temporary and anticipated that they will have rejuvenated their stock in a week's time. "There is no cause for panic."
Shell Uganda chairman Ivan Kyayonka said the fuel shortage had hit not only Uganda but the entire East African region.
"There is an acute shortage of diesel in the region because of fuel delivery problems in Kenya yet the demand is high. But the shortage is temporary because products are still in transit," Kyayonka explained.
Kyayonka, however, noted that fuel prices are expected to rise higher even when supply normalises because world oil prices have risen to unprecedented levels.
Energy minister Daudi Migereko appealed to the public to use the available fuel products sparingly, as they work on modalities to solve the problem. He said that fuel is coming in but the flow is not as steady as it should be.
The minister explained that a large ship that was carrying about 60 million litres of fuel to Kenya got a problem in the high seas and went back.
"Fuel dealers had to devise alternative arrangements to get fuel by using a small ship through Tanzania. The supplies have been coming but not as usual," he added.
Due to the rising oil prices, the cost of energy and transport is expected to rise as well. World oil prices hit a record high of $120 a barrel early this week.
The world oil prices have since mid-March been on a rising trend. The prices are expected to rise further with the low supply of fuel from OPEC member countries.
OPEC President Chakib Khelil revealed in a meeting recently that oil-producing nations were unlikely to increase production.
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The increasing world prices are as a result of the growing political unrest in the Middle East, the source of most of the world's oil, international analysts observe.
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