Elias Biryabarema
1 November 2008
Kampala — Widespread fuel shortages have hit Uganda and for the last two days motorists have been unable to refill from many fuel stations across city. By yesterday, lines of motorists were starting to form at some stations.
Petroleum dealers have tied the scarcities, mainly of petrol, to two recent incidents that have substantially curtailed the flow of fuel in the country: a truckers' strike protesting the deplorable state of Malaba customs parking yard and Kenya's abrupt banning of four -axle trucks.
"The two incidents have seen our stocks dwindle and the market is currently under supplied but we expect our stocks to return to normal levels very soon," said Shell's Ivan Kyayonka in an interview.
The Minister for Energy and Mineral Development said: "The principal factors responsible for the current price levels are; the exchange rate, transport issues and insurance premium," Starting October this year, Kenya forced dealers to use only three-axle trucks which carry less loads, 30,000 liters of fuel per truck instead of the four-axle tankers which carry 42,000 litres. The latter were banned purportedly because they exert immense pressure on roads thus wearing them down faster which reduces their life span.
Industry executives though have described Kenya's move as unrealistic since the trucks' axles cannot be changed overnight.
Meanwhile, the officials in the industry have rejected mounting criticisms that they are exploiting customers by increasing pump prices at a time when crude has been declining immense. Over the last month and a half, the price of a barrel has plummeted from a high of $147 to the current average of $64 in crude markets.
Prices have been hiked across the country with a litre of petrol now averagely sold at Shs2,700 from Shs2,490 while diesel sells at Shs2,550 from Shs2,350.
The Minister for Energy and Mineral Development said: "The principal factors responsible for the current price levels are; the exchange rate, transport issues and insurance premium," The BoU governor, Mr Tumusiime Mutebile chastised fuel companies in an NTV interview recently, wondering why they were keeping prices high against a sharply declining barrel.
The CEO of Africa Institute for Energy Governance, AFIEGO (an NGO that monitors corruption and unethical practices in the energy industry), Mr Dickens Kamugisha accused petroleum companies of "taking advantage of mass ignorance among consumers" about developments in international petroleum market.
Although the Ugandan government has in the past rejected calls to reign in excessive pricing by Petroleum companies ostensibly because the nation operates a market economy, governments elsewhere are responding to the public outcry and taking action.
Tanzania's Energy and Water Utilities Regulatory Authority for instance has given oil companies a one-week ultimatum to lower prices or "face regulation," according to a report in the Citizen newspaper.
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