Fuelling the poor in Uganda

Author: Joseph Ochieno. 

What you need to know:

  • The oil reserve in Jinja is pathetically inadequate. It was an initiative of a UPC government and has never been upgraded.   

Uganda’s national oil reserve at the Jinja depot is enough to fuel this country for only 10 days, a government spokesperson told Patrick Kamara during NTV’s On the Spot programme. That is a national security issue and it is scary. Imagine other strategic unknowns that could happen to this country; landlocked as we are and currently at war in DR Congo. Government said the fuel shortage and related price hikes were abrupt. Accidental, a regime as it is, is one without contingency plans to mitigate situations called emergencies. As I sat for this piece, a Kampala pump sold a litre at Shs5,800; out of town it will be higher for even poorer Ugandans.

This is how you deal with these situations; ensure sufficient reserves (not 10 days). Other countries secure reserves enough for years – in America – it is generations; yes, mere reserves. For a government with a conscience, for price rises and shortages outside their control and or borders, they apply fuel subsidies, tax cushions and price-caps, meaning governments take on burdens of price rises in order to protect average citizens, ensuring that private oil companies do not pass on tax and related cost burdens to ordinary people, key victims of whom are usually the poorest in society. 

Common sense provides that this is corrosive, punitive taxation beyond the obvious obnoxious indirect tax principles that most ordinary citizens do not have a clue about. They simply absorb increased fares with little or no complaint, blame ‘god’, then price rises for matooke or rice, yet any sensible government should know the obvious, negative implications on the economy generally.

Granted, that recent increases and shortages were a result of strike by truck drivers and the hold up at the borders of Malaba and Busia, following uncoordinated communication from the Ministry of Health, seemingly without knowledge of the ministries of Transport, Energy, Internal Affairs. That is atrocious; how would such critical decisions be made – even if in Cabinet – without a soul questioning, or a due consideration for cost, capacity or logistical implications?

The Prime Minister, in a statement – amid a national crisis – claims to merely have (now) ‘instructed’ the minister of Energy to ‘direct’ the relevant commissioner to ‘investigate’. In response, the national ‘gods’ angrily sunk her on the posh, swing-chair knowing that it is a proceed of the citizens’ tax shillings. Under a UPC-administration, heads would roll after a national apology.

These guys will not tell you that it is either sheer incompetence or deliberate indifference; here is why. The national oil reserve in Jinja is pathetically inadequate. It was an initiative of a UPC government and has never been upgraded. At the time of its construction, goods trains transported fuel from Mombasa, not the dangerous, environmentally un-friendly, choking, expensive trucks that possibly belong to a few-in-high-places.  

Here is the other; just last week, Kenya, the traditional peripheral capitalist state of this region, through its energy regulator, extended a price cap from last year for energy across the board. 

A week earlier, president Uhuru Kenyatta visited the nearly complete, upgraded and capacity-expanded offshore Oil Terminal at Kipevu, due for completion shortly, becoming the largest in Africa and wholly funded by Kenya Ports Authority. This, he said, would ensure constant and ‘adequate supply, limit queues of vessels, minimise demurrage costs and ensure price stability of petroleum products.’  The president then said, as if a bomb on shy-less Uganda, that the newly refurbished SGR railway from Mombasa-Nairobi-Malala and Kisumu, the new extension did not only keep the economy going during the pandemic but has lowered the cost of cargo from Kshs60,000 - to Kshs17,000.

A stunted nation, with stunted growth in the name of development, is stunting the future. 

The writer is a pan-Africanist and former columnist with New African Magazine