Fuel Prices Remain Stable as UGX 100 Tax Takes effect


Kampala – Fuel stations have maintained prices of fuel even after the new fuel tax of 100 Shillings that took effect on Thursday, July 1, having been approved by Parliament for the 2021/22 budget.

The government increased the fuel tax per litre of petrol and diesel by Ush100 for the financial year 2021/22 as a means to increase its revenue by an additional UGX196 billion. But all fuel stations have maintained the old prices that existed at least in the last one month.

Osman Mood, the manager of Hass fuel station located at Katanga (Kubiri), says his company last adjusted the pump fuel prices in April 2021. Petrol rose from UGX3,650 to 3,750 per litre and diesel prices were adjusted from UGX3,330 to 3,250.

‘’It was not automatic that the fuel prices would increase with the 100 tax added on the already existing tax as there are many factors that determine the fuel prices, ‘’says Mood.

John Irumba, the manager of Oryx fuel station along Sir Apollo Kaggwa, says the station last changed prices in May 2021 though he was hesitant to tell why they had to adjust prices at that time.

Irumba indicates that apart from the influence of international fuel prices, it is always the competitiveness within a given location in the sector that leads to price determination in a given area.

‘’We last adjusted our fuel prices in late May, the price of petrol was increased from 3,920 to 3,990 Shillings per litre while for diesel the price went from 3,490 to 3,550 Shillings per litre,’’ Irumba said.

Irumba explains that the station on average sells 500 litres a day, however, due to the lockdown, this has been affected to 300 litres per day.

At Oil Com, another fuel station along Sir Apollo Kaggwa road, the station supervisor who was hesitant to tell his name, noted that different factors determine prices and the 100 tax will not affect the pump price as of now.

Here the price of petrol was found at 3,880 per litre and for diesel at 3,390 SHillings per litre. Meanwhile, at some of the shell fuel stations, their fuel prices were found reduced instead.

On the other hand, fuel prices at Shell stations visited by URN that included Tula, Komamboga, Gayaza road and Kalerwe had all reduced from 4,020 per litre of petrol to 3,960 Shillings per litre.

Although then state minister finance David Bahati assured the country that the 100 Shillings tax increment on fuel was not expected to affect the pump fuel prices, fuel stations were seen hiking the prices within two weeks after the reading.

Meanwhile, one other factor that influences fuel prices is demand, and this has been low for a period of time due to the covid-19 pandemic that led to a ban on vehicle movement.

According to Rev. Frank Tukwasibwe, the commissioner Petroleum supply department in the ministry of energy, Covid-19 has greatly impacted fuel demand.

He says that before the lockdown the total fuel consumption per month was at 185 million litres which has now remained way below that.

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