Uganda has remained adamant on introducing fuel subsidy even amid hiked pump prices following supply disruptions partly caused by Russia’s invasion of Ukraine.
Moses Kaggwa, an acting director at the finance ministry says fuel subsidy and lowering the fuel tax would cost government much-needed revenue and increase the need to borrow, arguing that the Treasury receives $0.41 from every litre of petrol.
The country says it will allow a competitive environment and only intervene if dealers get “abnormal margins.”
In the recent past, Landlocked Uganda, which consumes 6.5 million litres of fuel daily, asked Kenya to allocate it a fixed monthly amount of fuel supply, seeking to alleviate shortages that have driven pump prices higher.
Uganda wants 110,660 cubic meters of gasoline, 110,400 cubic meters of diesel, and 12,000 cubic meters of aviation fuel shipped through Kenya monthly to meet demand that’s rebounded with the reopening the economy after easing pandemic-related restrictions.
Petrol prices in the country have jumped 19% this year to an average USh5,300 ($1.51) per litre.
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