Optimism as fuel prices drop further

Businessmen and experts have expressed optimism that the continued drop in fuel prices in Uganda will help to lower the cost of doing business.

In the past two months, there has been a drop in the fuel pump prices from an average of 6,800 Shillings a litre of petrol to about Shs5,800, and diesel from about Shs6,400 to now about Shs5,500.

Honey Malinga, the Commissioner for Petroleum in the Ministry of Energy and Mineral Development, says these prices will continue to drop because all the factors that contributed to the increase have since stabilized, and others have been contained.

The principal communications officer at the Energy ministry, Mr Solomon Muyita, attributed the fuel price reduction to a slight drop in prices of crude oil on the international market.

“We have seen a drop in crude fuel prices at the international market. In many areas, prices dropped from $100 (Shs372,751) to about $80 (Shs306,156). Usually, when there is a drop in crude oil prices, it translates to a drop in refined product,” Mr Muyita said.

“We have seen it for over two weeks, but only that our countries, which are land locked and far from the source, take time for that change to be realised at the pump,” he added.

Whereas the fuel prices are stabilizing as noted earlier, there is a noticeable difference between the prices of two major dealers in the market and others with the former having high prices than the latter.

This has kept the average price higher across the country.

The commissioner attributes this to expensive fuel, which was brought in by these big players through Tanzania during the perceived tension of the recently concluded Kenyan elections.

“As tension was building up in Kenya as the polls drew nearer, some retailers reduced their supplies and waited for the situation to normalize, however, these big players braved the increased transport costs and used the Tanzanian route, and made sure the country has reserves ready for the worst from Kenya,” he said.

According to Malinga, these big dealers, still have this expensive fuel in their reserves, and when it depletes, the pump prices will further reduce.