OIL supply is yet to stabilise in Uganda and prices remain high following slow clearance at Kenya's ports and border areas last week.
The slowdown in operations in Kenya was due to a weeklong shut down of most business operations in the country as many waited for the outcome of elections that were held on Monday, March 4.
According to international research and risk management firm Stratlink global, the Uganda Revenue Authority complained that trucks being cleared from Busia and Malaba borders had reduced significantly. A litre of super petrol shot up by between Ushs100 and 300 to retail at Ushs 3300 (Sh107.14) from the previous Ushs3200 (Sh103.80). According to various sources in Uganda, some marketers hiked the price to as high as Ushs3500 (Sh113.63).
"Business has not yet picked up as expected in Uganda's oil giant, Kenol-Kobil Uganda," said the company in an economic review and assessment report on the East African region.
Uganda which is land locked, heavily depends on Kenya's port of Mombasa for imports. As a result, oil marketers in that country increased fuel retail prices.
"The delay to officially release the election results of the Kenyan presidential election was in the last week causing apprehension and affecting operations of the Ugandan business community," said the report released yesterday.
The higher prices, the report said, will have a serious negative impact on Uganda's industries. However, the analysis also noted that some oil marketing firms like Shell Uganda and manufacturers such as Bidco had anticipated the disruptions and thus put in place contingency plans.
"The Ugandan unit of Shell built large reservoirs of fuel as a back up at Jinja, east of the capital Kampala. Bidco oil refineries moved stocks to neighbouring countries to avoid disruption," the report said.
This is not the first time Uganda is catching a cold after Kenya sneezing; in the dispute 2007 presidential elections , the roads connecting Uganda and Kenya were impassable due to post election violence thus disrupting supply for weeks. To tackle this problem, Uganda last week passed a new law on oil exploration that will also enhance production chain.
"In our view, the big leap in enacting the oil laws and implementing them is finally showing signs of development of key oil production infrastructure, potentially causing Uganda to be self sufficient and not depend on Kenya to import its crude," said Stratlink global in the report
Transporters at the Malaba border have resumed normal operations after withdrawing their trucks.
Most transporters had opted to park their trucks in Uganda after clearing their goods from the Port of Mombasa ahead of the March 4 elections.
The transporters feared the repeat of the 2007 post election violence when some trucks were set ablaze in parts of Rift Valley.
Clearing agents at Malaba Uganda confirmed that operations have resumed with loaded and empty trucks arriving from Mombasa and Kampala.
Malaba border had been reduced into a ghost town after clearance of cargo at the Port of Mombasa stalled after importers and exporters kept off.