Petroleum imports faced worst decline ever in 2020
Petroleum and related products imports experienced the worst decline in 2020, revealing the impact that Covid-19 has had on the sector.
The drop was most visible in May with imports dropping to about $33.9m from a monthly average of $86.2m
According to the Ministry of Finance Monthly Performance of the Economy report for the period ended December, the drop was first experienced in March, with imports dropping to $71.5m before worsening in April, falling to $40.5m.
It is the first time petroleum and related products imports have dropped since the 2007/08 Kenya crisis, in which a number of imports destined for Uganda from Mombasa were blocked due to an election dispute that spanned over a month.
However, the sector, according to Ministry of Finance has been recovering, shipping in an average of products worth $57.7m since June.
According to data from Finance Ministry, petroleum products worth $55.3m were imported in May, before increasing to $56.9m in September and $56.3m in October. Products worth $55.6m were shipped in in November.
The drop, according to experts is an indication of a massive decline in economic activities due to the effect of Covid-19 and related disruptions.
On an annual basis, according to Ministry of finance, petroleum products imports dropped by 29.8 per cent.
Petroleum import worth $738.1m (Shs2.7 trillion) were shipped in between November 2019 and November 2020 compared to imports worth $958.6m (Shs3.4 trillion) in the same period between 2018/19.
In the same period between 2017/18, petroleum products worth $981m (Shs3.6 trillion) were shipped into the country. Uganda is a net petroleum products importer, with an average shipment of the commodity worth Shs3.2 trillion since 2015.
Mr Peter Ochieng, an expert in the fuel business and a former dealer in markets such as Uganda, Kenya and Rwanda, attributed the drop to low consumption, resulting from reduced expenditure on motorable fuels.
“The lockdown saw borders closed. Transit cargo went down. Most factories were shut down and there were just a few people driving and riding,” he said, noting dealers and importers could have slowed on taking up new consignments amid a sharp decline in consumption.
Uganda mainly imports petrol, diesel, kerosene and Jet fuel.
According to the Uganda Bureau of Statistics (Ubos) abstract report 2020, imports of petroleum products in 2019 had increased by 4.5 per cent compared to 2018. During the period, the country imported 2,198,739 cubic metres of petroleum products compared to 2,103,939 in 2018, with volumes of petrol and diesel increasing by 8.2 per cent and 4.9 per cent respectively.
However, jet fuel and kerosene both experienced declines of 18.8 per cent and 7.3 per cent, respectively.
In 2019, according to Ubos, a total of 2.2 billion litres of selected petroleum products were sold, representing a 3.7 per cent increase compared to 2.1 billion litres in 2018.
The report shows that diesel, which accounted for 46.4 per cent of sales was the most consumed petroleuam product, followed by petrol (45.4 per cent), jet fuel (5.9 per cent) and kerosene (2.4 per cent).
“Annual performance by product showed that the highest increase in sales was in petrol with 9.1 per cent growth,” the report noted.
Diesel came second with 1.84 per cent while kerosene and jet fuel registered a decline in sales of 12.99 per cent and 10.1 percent, respectively in 2019 compared to sales in 2018.