East African Business Week

Kampala, Uganda-Despite a lull in the world market and uninterrupted supply from the Middle East countries, uncertainty about future supply has continued to push fuel prices up, especially in the East African region.
 Even as global prices eased to below US$100 per barrel of crude oil, the recent spike in fuel prices shows no signs of abating. Within a spate of one week, fuel pump prices in Uganda had risen by 25%, leaving much to the chagrin of consumers.
By the close of business last week, unleaded Petrol sold at UGX3, 500 per litre, up from Ugsh 2,800, while Diesel and Kerosene sold at Shs2950 and Shs2550 per litre respectively. Reports from the East African region show that fuel prices have risen up. In Kenya, fuel pump prices have gone up by 4.6% and 5.8%.
In Rwanda, fuel prices have gone up by between 5%, and 6% , the highest ever recorded in the country. Petrol has risen from Rwf965 to Rwf1,015 per litre and diesel, 6 %, from Rwf958 to Rwf1,015
Apparently, Uganda's fuel pump price hike has been the highest in the region. As always, one of the most aggravating things about the rising cost of fuel is the inability to do anything about it. It is now a common site for motorists to crane their necks or even come out of their vehicles to ensure pump attendants place the real quantity they are paying.
Adamant oil companies operating in the country, who dictate fuel prices, all cite global crude oil prices and the Dollar rate, and have no other better explanations for the volatile fuel prices that would benefit consumers.
While it is true that the US dollar has given the Ugandan Shilling a thorough beating, consumers have been looking at government to intervene.  However, since it liberalised the fuel market, consumers contend that Government has been silent whenever fuel price eruptions occur.
Shell, Total, Engen, Hass, Harred, Mogas are some of the key oil companies operating in the country. When contacted for comment last week, Shell and Total officials shared the same views of global prices and the weakening Uganda shilling that has lost grip of the US Dollar.
Despite interventions from the Central Bank, the ever weakening shilling now sells at UGX 2400 for one US dollar. Consumers now buy a litre of fuel at about US$1.50 per litre.
There is now a confirmed a fear that the prices will go to UGX5,000 per litre (US$2) if no intervention is done.
 "At this rate, and if nothing is done, we shall soon be buying fiuel at Shs5,000 per litre," a motorist identified as Charles Bogere said. "I used to put one litre and I could make some good returns, but these days a litre is nothing and our customers are also crying," Hassan Alika, a motorcycle operator, locally known as boda boda said.
Transport fares within the city, its suburbs and upcountry are also going up daily.  Uganda's main worry is that fuel price increase is never temporary. Whenever prices go up, they stay where they have reached or slightly come down, but still above the previous.
Asked why fuel prices never reduced whenever they rise, Daniel Segal, an Energy analyst says: "Regarding the fuel prices in Uganda, the pricing has complexity deriving from the numerous factors affecting it"   
He continues; "Still, alongside the international prices the other major factor is the UGX foreign exchange (FOREX) rate - namely UGX vs. US dollar.  Currently the local currency is at its weakest rate ever and like other imported goods the cost of the goods had moved upwards accordingly. "
But despite all the brouhahas, energy analysis insist that the primary factor has been uncertainty in the global oil  market, which in the current case actually has little to do with the perpetual issue of the weakening currency supply and demand in the case of Uganda.
 There is still plenty of oil in the market, with the massive US oil reserves as big as ever. But the fear that recent government shake-ups in the Middle East and Northern Africa is anticipated to affect supply in the future is the main problem.