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Fuel shortages hit Uganda once more

Wolfgang H. Thome, eTN  Mar 16, 2011

UGANDA (eTN) - "It is the bureaucratic red tape and interventions into the market mechanisms by constantly changing rules and goal posts for procurement and processing of crude oil and fuels by the Kenyan government," was the explanation by a top executive of a leading petroleum company in Kampala, when asked to comment on the current rise of fuel prices and ongoing shortages across the country.

"The shortage is also felt in Rwanda, Eastern Congo, and, for instance, South Sudan, all depending on imports into the region via Mombasa and then onward transportation to Uganda and beyond," he added before turning to the price rises.

"The fallen value of the Uganda Shilling in recent weeks and months combines with very high prices on the spot market, which supplies much of East Africa’s requirements. The crude oil price has risen a lot and the crisis in Libya has depleted the supply chain worldwide so the spot market is hardest hit. Add these factors and it explains why we are now facing such a difficult situation."

Other sources, however, blamed the government over not forcefully demanding from their Kenyan counterparts that imports of fuels via Mombasa destined for Uganda are exempted from their bureaucratic red tape or else shift greater import volumes to the port of Dar es Salaam and use the railway and lake ferries from Mwanza to Port Bell for transportation. This suggestion, however, has been made in the wake of every single shortage situation over the past years, and little if anything has changed, as neither the existing rolling stock of the Tanzanian and Uganda railways ‚Äď the latter anyway managed by struggling Rift Valley Railways ‚Äď are sufficient nor would the available ferry capacity permit to ensure the uninterrupted flow of imports.

The Libya crisis has also taken another dimension on the local scene, as they were the main financiers and partners to construct the pipeline extension from Eldoret in Kenya into Uganda, a project which is now, for all practical purposes, delayed indefinitely until the political situation is resolved, still leaving the issue of sanctions and asset freezes for the Libyan regime leaders and their cronies to be dealt with. The same applies for the Ugandan national reserve storage tanks in Jinja, whic,h in spite of assurances to the contrary, remain empty, causing anger and resentment among businesses and citizens depending on the availability of fuel at all times.

At times of a supply crisis, the content of the national reserve could be released into the market to stabilize both prize and supply levels, while at present the country is again held at ransom by speculators and forces beyond their control across the national borders.

A liter of petrol, according to an upcountry source, is now being sold for as much as 5,000 Uganda Shillings (US$2.07, the US dollar equivalent of 7.83 per gallon), if available that is, a price which is likely to add further increases in the cost of food, as transportation costs have risen already sparked by the shortage of fuel.

A few leading safari operators also admitted the shortage and cost increases to be a source of concern for them, and while a few have secured enough fuel in their own storage facilities to get through the immediate crises, another said, "I hope my cars will find fuel along the way; they carry some jerricans, but to complete a safari they will have to find fuel along the way."

A car hire company executive also told this correspondent that self-drive safari clients are presently warned to expect a problem when seeking fuel along their planned route and are cautioned to add fuel wherever and whenever they find it to be able to complete their journeys.

Fuel shortages hit Uganda once more
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