Ugandan motorists should brace themselves for the increasing fuel prices as they are to dig deeper into their pockets so as to meet their needs.
On average, most fuel stations around Kampala and upcountry are selling a litre of petrol at Shs3,750. However, some upcountry stations especially in the Western and Northern Uganda have increased a litre from Shs3, 600 to Shs3, 800.
Some experts in the oil business in Uganda are attributing the increase to the international prices which are on the rise.
International crude oil prices this month briefly hit $70 per barrel (about Shs255, 500) a figure it last traded at in December 2014. This was up from the December’s rate of $64 (Shs233, 000) per barrel.
Industrial watchers also attribute the volatile prices to the Organisation of the Petroleum Exporting Countries (OPEC)'s cuts on its production, the foreign exchange and increased demand for the commodity.
Mr Peter Ochieng, a regional general manager for Hashi Energy and expert on the oil business in an interview with this reporter, said: “All oil transactions are paid in dollars. The stronger dollar, the higher the pump prices will be for the final consumer.”
Since the beginning of the year, the dollar has exhibited its strength over the Uganda Shilling at the time when importers were making orders for the New Year. This means they paid more to get the products and this will be felt by the final consumer.
About a week ago, Kenya; the region’s leading economy, increased its retail pump prices for diesel, super petrol and kerosene.
The Energy Regulatory Commission reportedly said the prices of super petrol per litre will rise to $1.06 (Shs3, 869), diesel to $0.95 (Shs3, 476) and to $0.75 (Shs2, 737) for litre of kerosene, mainly used by poor homes for lighting and cooking.
ERC Acting director-general Robert Pavel Oimeke attributed the rise to upward adjustment in this month's pump prices to an increase in landed costs during the period of cargo importation.
The Free On Board price of Murban crude oil lifted in December 2017 was posted $64.85 per barrel, an increase of 1.89 per cent from $63.65 per barrel in November.
Last week, Brent crude climbed after members of Opec, the cartel of 14 oil-producing nations that accounts for 40 per cent of the world's output, said it would continue to limit supplies.
The RAC, the motoring group, has warned that rising oil prices could lead to higher forecourt costs for motorists.
Suhail al-Mazrouei, the UAE oil minister and Opec president, said it was committed to limiting output until the end of the year.
Last year, Opec and other nations including Russia said they would extend a deal to cut production to help support oil prices that had fallen below $50 (Shs181,225) a barrel when the agreement was struck in 2016.