Fuel Prices Will Return to Normal Next Week, Says Minerals Minister

The Minister of State for Energy and Mineral Development (Minerals), Hon Peter Lokeris, has reassured lawmakers that petroleum fuel prices are expected to return to normal by 10 February 2022. 

In the week commencing 01 January 2022, the country experienced a hike in petroleum prices by Shs 550 from Shs 4,450 per litre as of 17 December 2021, to the current Shs 5,000 per litre.

“The high petrol pump prices of petroleum products are caused by product scarcity and once supply returns to normal prices will become competitive again,” said Lokeris.

He warned that in the event that the pump prices go beyond the acceptable levels, the Petroleum Supply Act under Section 30 empowers the minister to take action on the errant operators. 

“The action can constitute closure of petrol stations, issuance of penalties or revocation of licenses in extreme cases,” said Lokeris.

He was presenting a statement on the supply and escalating petroleum prices during plenary sitting on Thursday, 03 February 2022. 

The minister explained that the reduction in stock levels and the resultant stock out of petrol in the country was caused by the COVID-19 spread control measures the Ministry of Health introduced that required all truck drivers to be tested. 

“The decision resulted in a riot by truck drivers which even blocked petroleum trucks that had been given priority lanes to secure supply of petroleum products,” said Lokeris.

Lokeris added that as of 26th January 2022, there was a noticeable reduction in the length of the queue at both Busia and Malaba border points which he said was a good sign towards reduction of the backlog. 

“Testing for COVID-19 for truck drivers has been halted until further notice. My ministry continues to engage the Uganda Revenue Authority on this matter,” said Lokeris.

He blamed the prolonged challenges of supply to constraints at border clearance thereby forcing some oil marketing companies to buy at retail prices and further retail. 

“It has resulted in increased pump prices and declining margins for both companies and dealers. The increase in pump prices ultimately increases the cost of living,” Lokeris said.

He said that there is a need to introduce a tax rebate for products from the southern route through Tanzania in order to diversify the supply routes.

“The medium and long-term solution is to invest in fuel strategic reserves to enable the country to deal with such occurrences in a sustainable way,” said the minister.

Credit: Parliament Team

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