While everywhere in the East African region is enjoying lower crude oil prices translated to lower prices at the pumps, this does not seem to be happening in Uganda. The broad economic factors across East Africa are by and large the same, and inflation and currency adjustments vis-a-vis the US dollar are also following similar trends in Kenya, Tanzania, Rwanda, and Uganda.
Yet, energy moguls in Uganda are publicly turning economic fundamentals on their head when trying to tell the country why fuel in the Pearl of Africa should cost unproportionately more there than for instance in neighboring Kenya or even Rwanda where fuel prices have dropped further and faster.
Safari operators who had hoped that the collapse of the global oil prices would result in lower operating costs for their tours, however, are still waiting to see any of the 50 percent drop in crude oil prices translate into such savings, keeping them, and the nation, puzzled and increasingly angry.
“This is what has been happening with the price of AVGAS for a long time. Here in Uganda it costs significantly more than in Nairobi, Kisumu, or even Mwanza, the latter two airports also having relatively higher landing cost[s] for this type of aviation fuel. Even the cost of JetA1 in Uganda is higher than it should be, and the oil companies blame it on the cost of transport. Now the same thing is happening with the cost of diesel, kerosene, and petrol. The oil companies are getting a huge profit windfall from all of this, and when you do not see even one of the multinationals brake ranks, you know that there is a cartel at work to rob Ugandans blind at the pumps,”
Notably, the government so far has stayed out of the brewing controversy, while in neighboring Kenya its government was proactive and had fuel prices significantly slashed by the Energy Regulatory Commission. Tanzania’s Energy and Water Regulatory Authority reportedly did the same while Ugandan’s are left out of seeing any such benefits come their way.
Uganda’s own crude oil production, for a number of reasons, has been delayed by several years while arguments rage on over the ultimate decision to refine all the crude eventually pumped in Uganda or find the means to build a highly-complex pipeline, which due to the nature of Uganda’s crude oil must be heated 24/7 to keep the black gold from turning into a solid mass.