OIL & GAS

Energy ministry: Why fuel prices will continue to drop

A man fuel a car at a station in Kampala. (PHOTO/Courtesy)

A man fuel a car at a station in Kampala. (PHOTO/Courtesy)

KAMPALA —The Ministry of Energy has said fuel pump prices in Uganda will continue to drop should the global prices for crude oil continue to drop.

According to Mr Solomon Muyita, the spokesperson of the Energy ministry, the current slight reduction in fuel pump prices in the country has been possible due to the drop in the cost of crude oil from over 100 dollars per barrel to between 80 and 90 dollars.

“The ministry has in the last two months been engaging oil marketing companies in discussion to bring the prices a bit down because the cost of crude oil have dropped. Crude oil is the major determinant of the fuel pump prices,” Mr Muyita said, adding “Some oil companies were saying that they had stocked a lot of fuel ahead of Kenya’s general elections and they first wanted to exhaust the stock that they purchased expensively but we asked them to bring the prices a bit down.”

A mini survey by this publication around the city center on Monday discovered that over the past week, fuel prices had dropped down between Shs300 and Shs400, a move that has seen motorists get extra millage.
For example, at Shell Jinja Road, a litre of diesel was at Shs5,790, Shs5,680 at Shell Old Tax Park, Shs5,780 at Shell Entebbe road and Shs5,990 at Shell Kibuli.

The pump price for Petrol was the same at all Shell petrol stations at Shs6,080 per litre.

Some of the TotalEnergies fuel stations that we visited were charging different prices.

For example whereas diesel at Total Energies Old Taxi Park station was going for Shs5,970 per litre, the same liter went for Shs5,780 at Total Energies located between Queens Way and Container village in the city centre.

The price for petrol at TotalEnergies fuel stations also ranged between Shs6,070 and Shs6,430 per litre.

At Stabex Kibuli station, the cost of a liter of diesel went for Shs5,690 and Shs5,890 for Petrol.

A week ago, the pump price per litre of petrol ranged between Shs6500 and Shs6800 while a litre of diesel ranged between Shs6000 and Shs6500, making motorists to dig deeper into their pockets.

Mr Muyita went on to raise hope among the motorists that the prices for fuel will keep going down as the cost of crude oil continues to drop too.

He said before fuel prices were hiked earlier this year, a barrel of crude oil was at about 50 dollars.

In January this year, the cost of diesel ranged between Shs4190 and Shs4400 while the cost for petrol was between Shs4990 and Shs5020.

On the issue of petrol stations charging different prices for the same products, Mr Muyita said the law gives power to oil companies to determine the pump prices so long as they don’t go beyond the ceiling price set by the ministry.

He said the petroleum department of the ministry of energy would continue to monitor oil companies to ensure that the provide quality fuel at a fair price.

Mr. Frank Mugabi, a boda boda rider who operates opposite the entrance of Old Taxi Park in Kampala city, appreciated the slight reduction but said they would be more relived if the current high fuel prices if it went back to about Shs3000 per litre.

The vice chairperson of the Federation of Uganda Taxi Operators, Mr Mustafa Mayambala said the reduction is minimal and its impact on their businesses will hardly be felt.

“We welcomed the reduction, but we are likely to continue feeling the pinch because it has reduces by a very small margin. I wish it could go back to where it used to be so that we can be able to raise the money for our bosses, and also spare some money for our families. As of now, all the money we make is spent on fuel.” Mr Mayambala said.

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