The Ministry of Energy has told parliament that the government has no control over the escalating fuel prices that have rocked the country in recent weeks.
The state minister for energy, Sidronius Opolot Okaasai noted that the hike in prices is being driven by demand and supply factors on the global oil market beyond its reach.
The state minister for Energy, Sidronius Opolot Okaasai told parliament that the current hike in pump prices has been triggered by an increase in demand for oil globally and prices on the international oil market with a barrel of crude surging from $74.35 in July 2023 to $82.45 in August 2023.
Okasaai further informed parliament that the ministry's hands are tied, adding that they will only continue to monitor the subsector and ensure a stable supply of petroleum products at the most competitive prices.
"Uganda operates a liberalized downstream petroleum market, where pump prices are determined by the forces of demand and supply. Several global factors have impacted crude oil prices like OPEC members who have implemented extra supply cuts to balance the oil market,leading to the reduction of overall oil production. When the global prices rise Uganda is directly affected.the deepening opaque macro cards are a big player," Okasai.
Minister Okaasai also says that the increased world oil demand that has reached the record levels,with demand hitting 103 billion barrels per day in June 2023 also contributed to the high fuel prices.
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Okasai "the demand of oil if now at 103bn barrows perday globally which puts pressure on the supply.the exchange rate is also increasing which equally impacts the on the pump prices. The dollar has continued to increase against the shilling.
However, legislators didn't seem satisfied with the ministers submission, some members even attempted to move a motion under rule 59 that Parliament rejects the ministers statement saying it doesn't provide interventions from the government.
Ssemujju " I move a motion under rule 59, l above that parliament rejects this statement. What even happened to our fuel reserves? "
Naluyima wondered, " Can we have a back up plan. What befell the buffers ?"
Other legislators have called for a stable supply of fuel in the country taking into consideration the fuel reserves to manage external shocks.
The speaker however ruled that the statement together with the committee report be debated tomorrow.
Fuel prices had stabilised, but in the past couple of weeks they have started to rise again. A litre of petrol is trading between Ugandan shillings 5100 and 5430 per litre while diesel which had reached 4600 Uganda shillings at some stations is now between shillings 4999 and shillings 5200 shillings.
