Fuel crisis spreads agony

By Patrick Kagenda.

One year since fuel scarcity hit, Uganda is still grappling with the shortage without a solution by the government. It started on Dec 30, 2007 with post-election violence in Kenya that saw the economies of its landlocked neighbours that depend on the northern corridor for imports, including oil, on the brink of collapse. Uganda was hardest hit by the fuel scarcity because it keeps no public reserves in spite of the state minister for foreign affairs Okello Oryem saying the country had anticipated violence in Kenya. In 48 hours after the Kenya chaos erupted pump prices in Uganda went flying to Shs 5,000 per litre of petrol. A week later the price had shot to Shs 9,000 per litre.

The government said it would use the central corridor (southern route) to bring in petroleum products from the port of Dar esalaam via Mwanza. To date nothing has been done by government on improving the southern route as the two marine vessels Mv Kaawa and Pamba continue to rot at Port bell pier.
This time, governments excuse on the causes of the fuel scarcity is piracy in the Gulf of Aden, oil products bought when oil prices were at their highest in August at US $147 a barrel, the increased consumption of petroleum products by thermal power generators and the many hydro power construction projects in the country. However the petroleum companies are saying the scarcity is a result of the poor delivery infrastructure. Fuel consumption has almost doubled but the delivery mechanisms have not been improved upon. To date Uganda consumes 2 million litres of fuel per day, 1.2 million litres of diesel, 600,000 litres of petrol and 200,000 litres of kerosene. Without reserves, Uganda needs an uninterrupted supply through Kenya. Government has since shelved the reserves issue and is basing on hopes of the planned construction of a mini-oil refinery in Hioima, to produce Heavy Fuel Oil, paraffin and diesel by mid-2009.