Fuel prices to remain high for two weeks, say experts
A petrol station pump attendant serves motorists at a Shell petrol station in Kampala yesterday. Photo / Frank Baguma
What you need to know:
- Two of the dealers spoke off record while the director of Stabex, Mr Gilbert Otim, yesterday explained that many dealers had stocked fuel bought expensively, so it would not make business sense even if the trucks at the eastern border of Malaba and Busia arrived in town.
Three top fuel dealers have said the country will continue to experience fuel shortages and that prices will remain high for at least another two weeks.
Two of the dealers spoke off record while the director of Stabex, Mr Gilbert Otim, yesterday explained that many dealers had stocked fuel bought expensively, so it would not make business sense even if the trucks at the eastern border of Malaba and Busia arrived in town.
“I don’t foresee the drastic drop of fuel prices as people think because some companies have stock which they bought expensively. They cannot change the price of this expensive stock immediately since they will want to recover the money lost due to the strike,” Mr Otim said yesterday.
“I don’t think everything will normalise in the shortest time possible because there are operational costs that have already been incurred by petroleum companies, for example, paying of the drivers’ daily per diems even when they were not moving,” he added.
Mr Otim also said retailers feel the pinch of the fuel crisis whenever there is a problem in the chain link.
“We as retailers are affected right from when the international fuel prices go up. The prices set by refineries affects us automatically. The jam at the border affects us because the price of the bulk fuel will go up, forcing we the retailers to also increase it,” he said.
On what should be done to prevent similar situations, Mr Otim said more engagements should be done right from the Energy ministry.
He advises the ministry to work closely with fuel dealers and know what is happening on ground.
“They need to visit border points, especially Malaba and Busia, and see what truck drivers go through and find solutions to their problems,’’ he said.
Mr Solomon Muyita, the spokesperson of the Energy ministry, said the country on average uses 6.5 million litres of fuel per day and about 200 million litres per month.
This, he said, means the fuel in the reserves cannot be enough in such a crisis.
Mr Muyita said there is a plan by government to put up a big storage terminal in Mpigi District, primarily for purposes of storage of fuel from the refinery that government is going to put up in Hoima District. He added that there are future plans to have a reserve in each region.
Compiled by Daniel Kibet, Ali Mivule, Esther Oluka & Anthony Wesaka
