Of UNOC and fuel prices falling to their lowest in six months

The prices of fuel have reached their lowest level in six months, with the Uganda National Oil Company (UNOC) hoping the trend continues.

UNOC Chief of Corporate Affairs Officer Tony Otoa attributed the fall to various factors.

“I know that people want the price to go back to Shs3,500 [per litre of fuel].  But it can’t. Times have changed. But over the last six months, yes, the prices have really gone low and I hope that they can actually even go lower,” Mr Otoa told Monitor on November 11.

The majority of car engines in Uganda run on either diesel or petrol. Diesel is mostly used for heavy-duty engines.

“The stability of Iran might affect the prices globally, not just for Uganda alone. And that is why we are pushing for the development of our own refinery, which means that even with these problems in the Middle East, we are still shock-absorbed by our own products in the country,” Mr Otoa said.

As of November 11, the average price of a litre of petrol within Kampala city was Shs4,900 while that of diesel was Shs4,700.

Last year, fuel prices rose above Shs5,000, with several factors blamed, including the short supply of oil globally due to the Russia-Ukraine war.

Mr Otoa gave other reasons for the current reduced fuel prices.

“We have maintained our constant supply of petroleum products into the country, so, at no time are we having any shortages or disruptions. We even have vessels [of fuel] coming [into the country] earlier than the expected time,” he explained.

In addition, he said, oil marketing companies are receiving products in the right quantities and at a good price.

“We are giving all these oil marketing companies the same uniform and low prices ranging between Shs4,000 and Shs5,000, per litre of fuel,” Mr Otoa said.

 “What has also changed is that the small petrol stations used to buy fuel from other oil marketing companies. But now, the small service stations can buy from UNOC, which was not the case before, meaning that they will make their purchases at relatively cheap prices,” he added.

While some of the fuel stations have reduced the prices, some continue to maintain slightly high prices. A manager of a TotalEnergies Uganda branch in Kampala said they are maintaining these because of operational costs, including maintenance and payment for their numerous workers.

Justification

What has also changed is that the small petrol stations used to buy fuel from other oil marketing companies. But now, the small service stations can buy from UNOC, which was not the case before, meaning that they will make their purchases at relatively cheap prices,” Tony Otoa, UNOC Chief Corporate Affairs Officer