East African Community Countries Urged to Regulate Oil Importation to Combat High Fuel Costs

Kampala, the capital city of Uganda, has been grappling with high fuel costs, with prices increasing from Shs2,850 ($1.25) to Shs3,500 ($1.50) for petrol over the past three weeks. The Kenya Ports Authority (KPA) has attributed the escalating fuel prices to hoarding by private oil companies, who import fuel, hoard it in their tanks, and sell it when prices increase. A KPA official, Mr. Mtengo, has urged East African Community (EAC) countries to think deeper and move away from a free market economy to regulate oil importation to combat high fuel costs.

Key Takeaways:

• The escalating fuel prices in Uganda have pushed motorists to the roadside, with purchasing power declining every other day.
• The current high costs of fuel in Uganda are attributed to hoarding by private oil companies, who import fuel, hoard it in their tanks, and sell it when prices increase.
• The KPA has blamed the high fuel prices on speculation and the failure of private oil companies to provide evidence of shortage.
• Mr. Mtengo has urged EAC countries to regulate oil importation to bring down high fuel costs, which are a burden to consumers.
• The Uganda Information and National Guidance Minister, Kabakumba Masiko, has attributed the crisis to piracy threats in the ocean waters.

Statistics:

• Petrol prices have increased from Shs2,850 ($1.25) to Shs3,500 ($1.50) over the past three weeks.
• Diesel prices have increased from Shs2,300 to Shs2,500.
• Kerosene prices have increased from Shs1,850 to Shs2,020.
• 79.9% of transit cargo from Mombasa port was destined to Uganda in 2009.
• The port of Mombasa handled 19 million (19,062,000) metric tones of cargo in 2009.

Sources:

• East African Business Week/All Africa Global Media via COMTEX, October 4, 2010
• Kenya Ports Authority 2009 Annual Review and Bulletin of Statistics
• Copyright East African Business Week. Distributed by AllAfrica Global Media (allAfrica.com).