Fuel prices in Uganda have soared to unprecedented levels, with petrol now costing Shs 5,400 per liter and diesel priced at Shs 4,800 per liter, according to reports on October 8, 2023.
This increase follows a government statement issued on September 5, 2023, by the State Minister of Energy and Mineral Development, Sidronius Okassai. In the statement, Minister Okassai clarified that the government would not intervene in fuel pricing and attributed the rising costs to factors beyond Uganda’s control.
Minister Okassai explained, “The surge in fuel prices is driven by global factors that are beyond Uganda’s control. Factors such as increased global oil demand, especially during the summer months in Europe and the United States, have significantly impacted oil prices. Economic activity and seasonal trends have also contributed to the worldwide rise in fuel costs.”
On Monday, major petrol stations like Shell Mulago priced petrol at Shs 5,400 per liter, while local stations such as City Oil Kamwokya listed it at Shs 5,530 per liter. Diesel was available for Shs 4,800 per liter.
The fluctuation in exchange rates has further exacerbated the situation, with the US dollar trading at Shs 3,770, up from Shs 3,719 on September 1, 2023, impacting fuel prices.
Furthermore, the decision by the OPEC+ cartel to reduce oil production by three million barrels per day to stabilize and increase oil prices has played a role in influencing the market. As a result, Brent crude oil prices have reached $92 per barrel, while OPEC members have priced it at $96.62 per barrel. This represents a notable increase from the 2020 benchmark oil price of $68 per barrel. OPEC has extended its production cut until 2024 due to unfavorable market conditions.
The ongoing Russia-Ukraine conflict has also contributed to the surge in prices. Russia’s reduction in Urals crude production, in retaliation against Western-imposed oil price caps, has further constrained global oil supply, leading to increased oil revenues for Russia.
Efforts to obtain comments from the public relations officer of Total Energies and the Ministry of Energy and Mineral Development regarding the elevated fuel prices were unsuccessful.
Uganda follows a liberal economic policy, and the government does not directly control fuel market prices, which are determined by supply and demand. Currently, Uganda imports its fuel from Kenya, which is reported to be the most expensive source in the East African region.
Fuel Prices in Uganda as of October 4, 2023:
| Fuel Type | Price per Liter (Shs) |
|---|---|
| Petrol | 5,400 |
| Diesel | 4,800 |
Exchange Rate Comparison:
| Date | Exchange Rate (USD to Shs) |
|---|---|
| September 1, 2023 | 3,719 |
| October 4, 2023 | 3,770 |
Crude Oil Prices:
| Type of Oil | Price per Barrel (USD) |
|---|---|
| Brent | 92 |
| OPEC Member Pricing | 96.62 |
