Petroleum suppliers see drop in fuel sales due to Covid-19

Monday April 20 2020

President Museveni recently announced a ban on public and private transport. FILE PHOTO

Petroleum distribution companies are likely to come out of the Covid-19 lockdown with some of the lowest sales, interviews with some players indicate.
Uganda consumes between 100 million and 110 million litres of petroleum products including petrol, diesel, kerosene and aviation fuel every month.
The country imports petroleum products worth about $215m 9, according to 2017/18 data from Bank of Uganda.
However, the Covid-19-rekeated lockdown is likely to cut back both importation and consumption, which is expected to eat into tax revenues.
At least on every litre of fuel sold, government gets more than Shs1,200 in taxes.
According to Uganda Revenue Authority 2018/19 estimates, government had hoped to at least collect Shs2 trillion from petroleum duty. However, this is likely to substantially fall due to effect of Covid-19.
Speaking in an interview last week, Mr Gilbert Assi, the Vivo Energy managing director, which supplies Shell-branded products, said: “ Yes, there is drop in sales due to the Covid-19 lockdown,” he said, noting most petroleum products consumers including public transporters had been out of operation for close to a month now .
However, he declined to share details of the decline, noting it was commercial information.
Daily Monitor could not readily establish the extent of the decline in sales given that both URA and the Energy Ministry declined to divulge into figures, noting the petroleum sector was a strategic national resource.
However, Energy Minister Mary Kitutu, told Daily Monitor Uganda had enough fuel stocks and more was being brought in via Kisumu.
“We have enough fuel and many trucks are bringing in more via Kisumu,” she said.

Eaten into sales and taxes

President Museveni recently announced a ban on public and private transport, which substantially reduced the number of vehicles on the on the road.
Therefore, this has eaten into fuel sales across the board and is likely to affect tax collections in the long-run.