Uganda’s national oil company has cautioned that fuel prices are unlikely to fall any time soon, even after the reopening of the Strait of Hormuz, one of the world’s most important oil shipping routes.
The Uganda National Oil Company (UNOC) said the development was welcome news for global energy markets, but stressed it would not translate into immediate relief at the pump for Ugandan motorists.
“It is indeed great news that the Strait of Hormuz is finally open after close to four months. Unfortunately, this does not translate into an immediate reduction of prices at the pump,” said Tony Otoa, UNOC’s chief corporate affairs officer.
He explained that fuel imported into Uganda is bought at least two months in advance, meaning supplies already in the pipeline were purchased during the disruption. Damage to oil production and refining facilities in the Middle East would also take time to repair, he added, with affected plants not expected to return to full capacity straight away.
“Those facilities will not be running at 100% immediately. This means the world will gradually see a resumption of production later in the year,” Mr Otoa said.
The warning follows similar comments from former Energy and Mineral Development Minister Ruth Nankabirwa, who told the launch of Uganda’s National Oil and Gas Policy in Munyonyo that prices could remain high for weeks. She said depleted reserves and strained supply chains linked to the Gulf region had already pushed diesel and petrol prices well above their levels before the conflict, with some stations charging considerably more.
Transport operators say they are struggling to cope. Brian Kwizera, deputy chairperson of the Uganda Bus Operators Association, said rising costs were difficult to absorb, with passengers resistant to fare increases regardless of how full a bus is. He called on the government to speed up Uganda’s first oil production, arguing it could eventually help bring down fuel and transport costs.
The Uganda Taxi Operators Federation has urged ministers not to introduce new fuel taxes while the sector is under pressure. Its chairperson, Rashid Ssekindi, said many drivers were no longer making the margins they once did, as fuel now ate up a larger share of their earnings. Competition from electric motorcycles and buses has added to the squeeze, operators say.
Traders, too, are feeling the strain. Edward Ntale, chairperson of the United Arcades Traders and Entrepreneurs Association, said businesses wanted clarity from the government on when prices might start to fall, given the ceasefire between the United States and Iran that preceded the strait’s reopening. He said firms were watching closely, as higher logistics costs had already been passed into the price of goods, even as customers pushed back.
Government officials, speaking at the same Munyonyo event, said efforts were under way to protect Ugandans from extreme fuel price swings while pressing ahead with the country’s first oil project. They said the move was part of a broader push towards energy security and reduced dependence on imported fuel.
