Members of Parliament have called for stern action against fuel dealers involved in the hoarding of fuel, saying they are taking advantage of the gas shortage to fleece motorists.
Deputy Speaker Anitah Among said the companies hoarding fuel “should be held culpable and action taken against them.”
Among, who on Thursday afternoon chaired a plenary session to discuss the escalating fuel prices in Uganda, said the “fuel crisis has affected so many people. We need to protect our people.”
State Minister of Energy Peter Lokeris said “if the pump prices go beyond the acceptable levels, the Petroleum Supply Act empowers the Ministry of Energy to take action on the errant operators.
“This can constitute closure of petrol stations, issuance of penalties or revocation of licenses in extreme cases,” said Lokeris.
It remains unclear how long the government will take to take bold action to contain the crisis which has traumatized motorists and increased the cost of living.
A liter of petrol now costs Shs 5000 from less than Shs 4,000 a month ago.
Lokeris said there are still challenges of supply as a result of constraints at border clearance which forces oil marketing companies to buy at retail prices.
“It has resulted in increased pump prices and declining margins for both companies and dealers,” he observed.
Hoarding
However, Mpaka, who led a Parliament committee to investigate the high fuel prices, reported that by 22 January 2022, the day of the Committee oversight visit, Uganda Revenue Authority had cleared on average 126 trucks in January which is more than the daily average of I22 fuel trucks cleared per day in December and months before.
“The committee observes that with these statistics it is clear that fuel is actually getting into the country but some fuel importing companies and fuel stations are taking advantage of the current situation to hoard and sell the fuel expensively,” said Mpaka.
Hon Mpaka said the government should fast track the consumer protection law which if had been in existence would have protected the consumer from exploitation through indiscriminate pricing, deceptive weights and measures where pump owners intentionally give less fuel than what is paid for at the pump and misleading fuel price display at the stations.
Uganda consumes about 6.5 million liters of petrol per day and yet the existing strategic stocks have the capacity to only hold 10 million liters of super petrol and 20 million liters of diesel which is only equivalent to 3 days of the country’s stocks.
According to One Petroleum(U) Ltd, the fuel crisis was compounded by the depletion of super petrol in both Kenya and Tanzania. Diesel supply wasn’t affected since aside from a diminished number of trucks available for reload diesel stocks were sufficient in Kenya
Lokeris said there is a need to introduce a tax rebate for products from the southern route through Tanzania in order to diversify the supply routes.
“The medium and long-term solution is to invest in fuel reserves to enable the country to deal with such occurrences,” he observed.
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