27 November 2012

Uganda: Weak Shilling Forces Fuel Prices to Go Up

Kampala — Fuel prices have gone up as a result of shortage in supplies and appreciation of the dollar against the Uganda shilling, Fuel dealers have told East African Business Week.

According to Mr. Ivan Kyayonka, the Shell Uganda Managing Director, the shilling that has slid to 2650 from 2415 against the US dollar early in the year has impacted fuel importation hence an increment of about Ush300.

The upward trend in fuel prices has also been attributed to a sudden shortage in supplies from Middle East countries where most of them import fuel.

"These price changes have been mainly due to a weakening shilling," Kyayonka told East African Business Week.

According to our survey, petrol had shot up to Ush3750 ($1.44) from Ush3450 ($1.32) in most fuel stations. Diesel, the most consumed fuel commodity, had also increased to Ush3550 ($1.36) from Ush3450 ($1.28).

A dealer at Total Petrol Station in Bukoto, a Kampala suburb concurred with Mr. Kyayonka that the week shilling is pushing fuel prices up.

"The Bank of Uganda has to do something to strengthen the shilling," he stressed.

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