Govt pushes for lower, stable fuel pump prices

The government has started engaging different stakeholders within the energy sector to have fuel pump prices lowered and stabilised.

Among the different stakeholders include the oil marketing companies (OMCs), Uganda National Oil Company, and the private storage terminal operators.

Speaking shortly after a tour of the Jinja Storage Terminal in Jinja City on Thursday, the Minister of State for Economic Development, Ms Beatrice Akello, said the unstable fuel pump process forced her to visit the facility to find out the cause.

“When UNOC on behalf of the government started ordering fuel directly without middlemen, at first we were thinking the fuel process will come down,” she said

She added: “But instead we realised that the fuel prices went up. So, we began to follow and find out why the fuel process at the pump shot up,” she added.

Some of the challenges realised were related to transportation by road which is partly expensive and taxes, among others.

UNOC acting Chief Executive Officer Phillips Obita, however, said since they took over the sole importation role, there has been a reduction in fuel pump prices.

“The pump prices for the refined petroleum products, as you may have seen, are getting better from where we picked them up before we started the sole importation mandate. We expect it [fuel] to be a lot lower than where it is,” he said.

As of November 8, the average price of petrol in Uganda stood at Shs5,000, and that of diesel at Shs4,700.

UNOC recently assumed full responsibility for the importation of petroleum products, marking a significant shift in the nation’s energy landscape.

After UNOC held the exclusive role of importing petroleum products, which are subsequently distributed to OMCs,.

Currently, Uganda has a total storage capacity of 115 million litres of fuel, of which 30 million are at the storage terminal in Jinja. 

The other 70 million litres are privately stocked by Mahathi Infra Uganda Limited trading as Lake Victoria Logistics and 15 million litres are being held by the OMCs. 

According to the terminal operations manager of UNOC, Mr Gershom Rwakasanga, these storage facilities are able to hold the country for only 16 days in case of any shortage. 

“Jinja is 30 million litres but we feel we need more storage facilities in Uganda to be able to hold enough buffer stock that can at least take Uganda for a month or more in case of any scarcity,” he said

However, there is hope that the storage capacity might increase once the new Kampala Storage Terminal under the EACOP project in Mpigi District is operationalised, with the expected total capacity of 320 million litres.