FUEL PRICES INCH UP DESPITE GOVT PRICE WARNING

DAILY MONITOR

Fuel pump prices edged up at the start of the week, with motorists now paying up to Shs 5,399 per litre of petrol as global oil market tensions continue to filter into Uganda’s economy.

Petrol prices rose by about Shs100 to Shs149 from last week’s average of Shs 5,250, with stations in Kampala now selling between Shs 5,350 and Shs 5,399 per litre. Diesel increased to around Shs 5,150, up from about Shs 5,000.

The adjustments come despite government appeals to oil marketing companies to keep pump prices stable.

Energy minister Ruth Nankabirwa had earlier cautioned oil marketing companies against increasing prices, citing incoming fuel shipments.

However, retailers have continued to adjust pump prices in line with global market movements.

International crude oil prices have risen to around $100 per barrel from about $60 in recent weeks, driven by tensions in the Middle East and disruptions linked to the Strait of Hormuz, a key global shipping route for oil.

Uganda National Oil Company (UNOC), working with Vitol Bahrain, has secured alternative supply arrangements, though the impact on domestic prices has yet to fully materialise.

The government says more than 210 million litres of fuel have already been delivered, with an additional 300 million litres in transit, expected to support supply through April.

Analysts warn that sustained fuel price increases could ripple through the economy, raising transport costs and pushing up inflation.

“The prices of goods will soon increase if fuel prices continue to rise,” Kampala City Traders Association acting Chairperson Issa Ssekito told Monitor in an earlier interview.

The currency market has also come under pressure, with the Uganda shilling trading at about Shs 3,728/3,738 against the dollar, weakening from around Shs 3,500 before the crisis.

Money market analyst Stephen Kaboyo of Alpha Capital said global uncertainty is weighing on emerging market currencies, including Uganda’s.

“The global dollar has emerged as a safe-haven currency, while oil prices have become a barometer for risk appetite. Uganda, being a net energy importer, is likely to face detrimental consequences from the volatility in oil prices,” Kaboyo said.

Traders have called for government intervention to stabilise prices and cushion consumers from further increases, warning of potential inflationary pressure if the trend continues.