Uganda is going through a tough time at the moment with fuel prices continuing to rise as the most of the drivers around Kampala are scouting everywhere for cheaper petrol.
Some have resorted to blaming the Ugandan government for mismanagement and poor planning which has led the country into another sink hole.
Right now petrol at almost all the fuel stations around Kampala is priced at UGX 3,900 sometimes even hitting UGX 3,950 unlike the previous UGX 3,700.
What is the real reason for the increase in Uganda’s fuel prices? Is it because there is scarcity, are we out of stock? Did government increase the tax on petrol stations and fuel hauling businesses? Is it the dollar? So many factors could be blamed but it is none of these.
The truth behind the rise in oil prices all over the world from $40 a barrel to $65 now is due to the decision by OPEC and several oil producing countries to freeze mining until the price raises and they sell most of their excess reserves.
Since Uganda is a land locked country and has to import its oil from other countries, this has also put pressure on the economy leading to oil price wars we are facing now.
The OPEC deal has influenced the global price causing the prices for a barrel of oil to increase severely which is negatively affecting Uganda. However, this is where we blame the businesses in Uganda and the government – the failure to rely on our petroleum reserve plants.
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If the government of Uganda and the responsible stake holders took advantage of the oil reserve plants, we wouldn’t be in this mess right now. The government is supposed to buy petroleum in bulk at lower prices and store it in them then sell it at a stable relatively lower price to suppliers and fuel stations when the world market price goes high.
Will the oil prices go down? If they do, is there hope Ugandan stake holders will also lower their prices or maintain them like they did in the last fuel hike? Time will tell.