Fuel prices expected to stay stable

Kampala, Uganda | THE INDEPENDENT | Fuel prices in Uganda to remain stable even when tensions between the United States and Iran have seen the global prices edge up a little bit, a dealer has said.

According to Daniel Mushabe, the General Manager of Mount Meru Petroleum Limited, most dealers had either finished ordering or their fuel was already on the way before the US and Iran tensions.

Global oil prices climbed to more than $70 per barrel on Monday after the US missile killed the Iran general Qassem Soleimani in Baghdad on Friday. The oil prices move up in anticipation that an escalation in the conflict in Middle East could cut global supply.

Industry analysts, however, said there is much more production outside the Middle East. Also, on Wednesday, US President Donald Trump spoke with a measured tone, indicating that “Iran wanted a deal” – calming fears that there could be big disruption on oil trade.

Global prices fell back to below $69.

Mushabe said, however, there is already a squeeze in the local market because of local factors, including the fact that some dealers are still trying to get transit licenses to move their fuel from port in Kenya to Uganda.

Uganda consumes at least 180m litres of fuel monthly, according to industry sales figures we have seen. Vivo Energy, the largest distributor, sells about 40 million litres monthly.

Government says its storage facilities in Jinja can store as much fuel for the country to consume at least a month.

In October, government opened another reservoir in Entebbe, operated by Mahathi Infra Uganda Limited, which can hold up to 70 million litres although it will start operations in April 2020.

Evelyn Anite, the state minister for privatization, said then that the project means there would be no abrupt shortages once the project is operational.

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