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Kenya Elections: Why Uganda’s Fuel Pump Prices Will Increase

Whenever Kenya, East Africa’s largest economy goes to the polls, Uganda and other EAC member states suffer trade disruptions.

The bloody 2007/8 elections  massively disrupted business in Kenya and the East African region at large, with a number of Ugandan traders losing their merchandise worth billions. There was a shortage of petroleum in the whole of Uganda, a thing that paralyzed business.

This is because Uganda like her peers in the region depends on Kenya’s infrastructure especially the Mombasa Port for importation and exportation.

The Northern corridor is shorter and less costly compared to ferrying goods through Dar-es-Salaam.

While the 2013 elections were quite peaceful, there are fears that the August8, 2017 election could turn out violent given the prevailing circumstances.

ALSO READ: How Kenya Elections Will Affect Uganda’s Economy

The tight race is between former Prime Minister, Raila Odinga, who is carrying the flag for The National Super Alliance and incumbent President Uhuru Kenyatta.

In a statement issued before Parliament last week, Eng. Irene Muloni, Uganda’s Minister for Energy said that Uganda’s preparedness in case of fuel shortage hinges on the effectiveness of import routes through ports of Mombasa and Dar es Salaam as well as fuel stock levels at various in-country storage facilities.

However, as Kenya heads to the polls, Ugandan traders have already been advised to use the costly Dar es Salaam port to avoid losses that may arise in case chaos erupts in Kenya.

In an earlier interview with Business Focus, Everest Kayondo, the Chairman, Kampala City Traders Association (KACITA) said while they have fears over what the pre and post-election situation will look like, they already have some measures in place to avoid interruptions in case of clashes.

We have already advised our traders to get their merchandise through Dar es Salaam route as elections in Kenya take place,” Kayondo said.

He added: “Once bitten, twice shy. We don’t want to be caught by surprise like we were in 2007,” he said, adding that so far they haven’t been inconvenienced by the political situation in Kenya.

Why Fuel Prices Could Go Up

According to Muloni, the Dar es Salamm is the only alternative route for Uganda in case of disruptions on the northern corridor route.

“However, the resultant pump price would be slightly be higher (by about Shs85 per liter) in such a scenario given that the unit cost of importing through Dar es Salaam route (US$138 per
, covering a distance of about 1,600km) is relatively higher than that  on the northern corridor  (US$115 per  , covering a distance of about 1,200km),” Muloni said in a statement dated July20, 2017.

The Minister added that in case of disruptions through the Mombasa port, Uganda has “in-country stock that can take us for 16 days within which additional supplies can be mobilized through the Dar es Salaam route,” she said. The increase in fuel prices would result into increase in prices of other goods and services, a thing that may see inflation go up.

The minister’s statement was responding to Kiboga East MP, Kiwanuka Keefa, who earlier in July raised the issue of fluctuating fuel prices in the country.

Muloni said fuel prices are a result of a combination of factors such as cost of crude oil and refined products on the international market, transportation costs and the exchange rate.

She however said fuel prices have been relatively stable for the last six months.

“The average prices per liter for the last six months are Shs3, 000 for Diesel, Shs3,450 for Petro and Shs2,600 for Kerosene,” she said.

 

 

 

 

 

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