The Independent Uganda: You get the Truth we Pay the Price
Lower prices in EAC
On the other hand, Kenya, Tanzania and Rwanda have recorded a sharp fall in fuel prices citing a fall in prices on the international market.
Fuel consumers in Kenya, for instance, are paying Kshs89.1 (Shs 3,129) per litre for petrol. This is up by Kshs5.77 (Shs 202) paid last May, according to the Energy and Petroleum Regulatory Authority.
The regulator, however, spared diesel and kerosene users, after it lowered the prices of the commodities by Kshs 3.80 (Shs 133) and Kshs 17.31 (Shs 608) per litre to trade at Kshs 74.57 (Shs 2619) for petrol and Kshs 62.46 (Shs 2,194) per litre, respectively.
EPRA said in a statement that the change in the petrol price is a result of a 31.54% increase in the average landed cost of imported super petrol from US$188.70 a cubic metre in April to US$248.21 a cubic metre in May this year.
The Authority, however, said during the period, the average landed cost of imported diesel and kerosene dropped by 5.58% and 51.84% respectively, leading to a fall in the prices of the two commodities.
Based on the new price list, petrol in Mombasa is retailing at Kshs 86.62 (Shs 3,042), diesel at Kshs72.09 (Shs 2,532) and kerosene at Kshs59.99 (Shs 2,107) per litre.
Motorists in Nakuru are paying Kshs 88.96 (Shs 3,124) for super petrol, kshs74.62 (Shs 2,621) for diesel and Kshs 62.54 (Shs2, 196) for kerosene per litre.
In Eldoret, motorists are paying Kshs 89.94 (Shs 3,159) for petrol, Kshs75.59 (Shs 2,655) for diesel and Kshs 63.51 (2,230) for kerosene per litre, while in Kisumu, super petrol is retailing at Kshs 89.94 (Shs3,159), diesel at Kshs 75.58 (Shs 2,654)and kerosene at Kshs 63.51 (Shs 2,230) per litre.
EPRA Director General, Pavel Oimeke, said the new fuel prices had considered the changes effected by the Tax Laws (Amendment) Act of 2020 that made taxes and duties part of the vatable amount in the calculation of VAT for petroleum fuels.
“The objective of the fuel pricing regulations is to cap the wholesale and retail prices of petroleum products, which are already in the country, that the importation and other prudently incurred costs are recovered, while ensuring reasonable prices to consumers,” Oimeke said.
In Tanzania, the Energy and Water Utilities Regulatory Authority (Ewura) announced a reduction in fuel prices on May.06 with a litre of petrol decreasing by Tsh219 (equivalent to 10.5 %), diesel by Tshs 143 (7.17 %) and kerosene reducing by Tshs 355 less (equivalent to 18.45 %) citing fall in the prices of the commodity on the international market.
Ewura’s said the retail prices for petrol and diesel in Northern regions including Tanga and Kilimanjaro as well as Arusha and Manyara also dropped by Sh463 (21.88%) and Sh377 (18.21%), respectively.
Motorists in Dar es Salaam are buying petrol at Tshs 1868 (Shs3018), diesel at Tshs 1846 (Shs2, 982) whereas kerosene is retailing at Tshs1, 568 (Shs2, 533) per litre.
Those in Tanga, Same, Manyara, Arusha, Mwanga, Moshi are the greatest beneficiaries as they are set to buy petrol at less than Sh1800 (Shs2, 908) a litre.
Ewura attributed the fall in prices due to the global trends that has largely affected oil prices.
Similarly, in Rwanda, the Rwanda Utilities Regulatory Authority (RURA) announced last month a significant fall in fuel prices for both petrol and diesel.
The regulator said a litre of petrol now costs Rwf965 (Shs 3,778, down from Rwf1, 088 (Shs4, 260) in March while diesel now cost Rwf 925 (Shs 3,622) down from Rwf1, 073 (Shs4, 201) during the same period under review.
The regulatory body attributed the latest drop in prices to the cost of petroleum products on the international market.
Possible solution
Going forward, Nalunga says there’s need for government to remove taxes on fuel especially during this period of coronavirus pandemic to lower production and transportation cost in the country.
“Our position has been that instead of giving incentives to these companies, let them not increase taxes on fuel because it is bound to affect the already ailing economy because of the multiplier effect it has on various sectors,” she said.
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Prices dropped in most countries all over the world, even countries that use less fuel than Uganda. And the countries that use a must high volume saw even a more significant reduction in the price. In Uganda, most are not aware of the global situation over oil pricing. So the government wants the price to stay consistently higher to keep its tax collection high. If the price were to drop as the crude oil price dropped, Uganda would miss out on a significant amount of direct taxes. If prices decreased, consumption would increase, which is useful for a more substantial number of businesses, not just the government as it is now. Then the tax revenue would increase over broader participation from the entire country.
Simple math. If I am spending as a business 200.000ugx per day on fuel for the business, price drops 10%. That is direct, in the pocket savings of 20,000 ugx per day. If my one truck operation is on the road six days per week, then I am saving 120,000 ugx savings per week, 480,000 ugx per month. That can help me buy another truck and put another person in the workforce. That would benefit not only government tax needs, but the general population and business at the same time. We all know operators with 3 and 4 vehicles on the road, do the math. So we see the government, in reality, is hindering growth just for quick tax money.