Fuel prices to remain high over shilling instability and global prices

Fuel pump prices in the country are likely to keep on an upward trend owing to the continued depreciation of the shillings against the dollar, officials have warned.

According to the Reverend Frank Tukwasibwe, the commissioner of Petroleum Supply department in ministry of Energy, the continued increase in fuel pump prices is a result of steady rise in the prices of Brent crude, the international benchmark for oil prices and refinery premiums on the global market.

Global benchmark brent crude has been on an upward trade this month, hitting $75 a barrel on Tuesday, the highest trading price since November 2014 when prices plummeted from $100.

“That coupled with instability of our shillings which results in high operation (importing) costs by the fuel marketing companies it is likely prices will remain high,” Rev Tukwasibwe said. “But also don’t forget our market is liberalised so we unless we are regulating but we cannot intervene in operations of the [fuel] importers.”

Besides fuel imports, the depreciating shilling has also had far-wide implications on other commodity prices. The shilling depreciated further this month to Shs3700.

Fuel pump prices have been on the increase since late last year, up from an average of Shs3,500 for petrol and Shs2,900 for diesel to currently Shs4,000 for petrol and Shs3,600 for diesel.

Rev Tukwasibwe however said compared to neighbouring countries, Uganda’s fuel pump prices remained reasonably lower.

Uganda’s fuel/petroleum products imports as of mid-last September averaged at 85,048,119 litres with demand growing at 7 percent per annum, according to ministry of Energy.