The government of Uganda expects fuel prices to stabilize with minimal variances across different brands within the next three months, according to Energy State Minister Sidronius Okaasai Opolot.
This projection follows the government’s recent takeover as the sole importer and supplier of petroleum products in Uganda.
Minister Okaasai explained that while small operators have already lowered their fuel prices, larger companies like Shell and Total E&P are still offering higher rates due to existing stock purchased before the government assumed control. He noted that once these stocks are depleted, prices should align more closely across the board.
“Give it three months and the impact will be realized across the board. The small ones will be able to compete. Maybe there will be a small variance in prices because of brand and operational costs, but it won’t be as big as it has been,” Okaasai said.
Currently, smaller dealers have reduced fuel prices to approximately Shs5,000 for petrol and Shs4,600 for diesel. In contrast, the larger companies continue to charge around Shs5,185 for petrol and Shs4,950 for diesel. This disparity has raised questions among consumers, especially given that all suppliers are now sourcing fuel from the same provider, Uganda National Oil Company (UNOC).
Tony Otoa, UNOC’s chief corporate affairs officer, emphasized that since June, the government has provided petroleum products to local oil marketing companies at competitive rates, helping Uganda achieve lower fuel prices compared to regional counterparts. “Prices are the lowest in the region. We are the lowest despite the logistical hurdles and the fact that we are landlocked,” Otoa stated.
However, data from GlobalPetroPrices.com shows that while Uganda’s fuel prices have dropped, they remain higher than in neighboring Tanzania and Rwanda. Petrol currently costs Shs5,153 in Uganda, compared to Shs4,256 in Tanzania and Shs4,496.5 in Rwanda. Diesel prices in Uganda also remain higher at Shs4,950, compared to Shs4,077 in Tanzania and Shs4,546 in Rwanda. Both Tanzania and Rwanda, however, offer fuel subsidies, which help mitigate price fluctuations.
Uganda’s new approach to fuel supply began in July when the government made its first direct import of oil products, effectively cutting out middlemen. This move, according to officials, was aimed at curbing the escalating pump prices that had long burdened Ugandan consumers.
Despite initial government projections that fuel prices would fall below Shs5,000 under this new arrangement, many consumers have been frustrated by the slow pace of change and the significant price discrepancies between fuel stations.
Minister Okaasai has urged patience, assuring Ugandans that prices will eventually level out once existing stocks are exhausted. He also emphasized that quality would be maintained across all suppliers, dispelling concerns that smaller operators might be selling inferior products.
“If we are supplying all oil marketing companies, it means we are supplying uniform products. I want to remove the notion that small companies are selling poor-quality products,” he said.
While acknowledging the difficulty of predicting a specific future price due to international market dynamics, Okaasai assured Ugandans that the removal of middlemen would enable UNOC to set consumer-friendly prices without compromising profitability.
“As government, we can influence what cap UNOC will use, and it will be pro-people. Again, we want UNOC to distribute fuel to filling stations so that we can manage quality and ensure fair pricing without the need for abnormal profits,” he concluded.
