Fuel marketers accuse URA of escalating fuel crisis

A motorist fuels at a Total fuel station in Kampala last week. PHOTO / FRANK BAGUMA

What you need to know:

  • Shs6,000 Cost. Average cost of a litre of fuel in Uganda.

Oil marketers have accused Uganda Revenue Authority (URA) of escalating the fuel crisis currently facing Uganda. 

In a statement released on Tuesday, more than 40 oil marketing companies represented by Cristal Advocates, claim that URA is insisting on payment of unrealistic taxes,” which are likely to constrain supply. 

“If URA is unrelenting that the fuel importers pay these foreign transporters less of the 15 per cent, withholding tax, they are unlikely to provide the transportation services, potentially escalating the fuel shortages in the country,” a statement by the Association of Oil Marketers (U) Limited, reads in part. 

They further claim that if foreign transporters decline to receive their service payments less of the 15per centwithholding tax, it is likely that oil marketing companies in Uganda will shoulder the burden of this tax, which will increase their transportation costs. 

Inevitably, the statement reads, such a cost will be absorbed into pump prices. 
Fuel prices have escalated since the beginning of the year, with a litre of petrol selling at an average of Shs6,000. 

This had been worsened by a more than 10-day strike in which truck drivers had rejected a decision by the government to charge them $30 (Shs105,819) to test for Covid-19 before accessing Uganda. 

However, the return to stable supply continues to elude suppliers days after the government scrapped the mandatory Covid-19 test requirement. 

In the statement, oil marketers indicated they have petitioned the Minister of Finance, to intervene in the tax dispute, fault URA for demanding 15 per cent withholding tax on all foreign transport payments. 

“The government is implementing the National Transport and Logistics policy aims at enhancing Uganda’s competitiveness in the national, regional and international markets. The success of this policy depends on how well the government implements the framework of government policies including taxation,” the petition to Finance Minister Matia Kasaija, reads in part.

Oil marketers are concerned about the current tax policy, which applies to income from inbound and outbound transportation and logistics services, undermining the competitiveness of Uganda’s business environment .