Nigeria's foremost Online Energy News Platform

Uganda’s petrol prices rise ahead of new tax

Even before the new tax on fuel comes into effect on July 1, fuel stations have already increased pump prices for the product.

Through a mini-survey, Daily Monitor has established that the pump prices of fuel have significantly increased, with operators of public transport such as taxis and boda boda riders left with no option but to pass on the increment on to their clients.

In Masaka City, fuel prices have also increased. At Shell Buddu Filling Station, a litre of petrol is at Shs4,100, up from Shs4,000, while that of diesel is now Shs3,650, up from Shs3,600.

At Mogas filling station, petrol now costs Shs3,800 per litre, up from Shs3,750 last week, while a litre of diesel currently costs Shs3,350 up from Shs3,300. A litre of paraffin is now Shs2,980, up from Shs2,950.

A pump attendant at Mogas filling station, who preferred anonymity in order to speak freely, said the prices have been reviewed upwards to ‘warm the customers up’ for the new tax on fuel, which takes effect July 1.

“It is no longer a secret that prices are going to be raised after the government slapped new taxes on the fuel and, of course, it will affect the final user,” he said.

At Gaz filling station on Mutukula Road, petrol now goes for Shs3,750 a litre and Shs3,600 for diesel.

At BAM filling station on the same road, a litre of petrol is at Shs3,800, up from Shs3,750, while that of diesel is at Shs3,350, up from Shs3,300 last week.

Mr Sulait Lutakome, a proprietor of a fuel station in Kalangala Town Council, says the fuel prices are determined by the suppliers and the distance they move to reach their filling stations.

“We are forced to increase prices based on the selling prices by the suppliers. Given the current situation, the hiked prices are in preparation for the new tax in the next financial year,” he says.

Mr Gerald Kiggundu, a taxi operator who plies the Kalangala-Masaka road, said: “We are working at a loss. We call upon the government to regulate the prices of fuel since every filling station has autonomy over their fuel prices,” he told Daily Monitor on Monday.

In Lugazi Municipality, Buikwe District, almost all major fuel filling stations have increased prices of fuel.

A litre of petrol currently sells for between Shs3,900 and Shs4,090, while that of diesel is sold between Shs3,550 and Shs3,670, depending on the filling station.

Because of this, many boda boda riders in the municipality are refuelling their motorcycles from smaller petrol stations, which charge slightly lower prices compared to well-establish petrol stations.

Mr Akram Mudduse, a truck driver in Mpigi District, attributes the increasing fuel prices to the general rise in prices of basic necessities.

“Those who buy things from markets know what I am talking about. Prices of basic items have increased and since fuel sellers also buy from the same markets, they are increasing the prices of fuel to keep in business and also pay government taxes,” he says.

The situation has greatly affected fishermen and motorboat transporters.

Mr Sunday Kayita, who owns about 100 fishing boats at Kachungwa Landing Site in Mazinga Sub-county, Kalangala District, said he has so far suspended operations of 30 of his boats due to the surging fuel prices amid slow business.

“All our work depends on fuel (petrol) and if prices increase, it affects us squarely. We could have increased prices of fish, but it is also scarce in the lake,” he said.

An attendant at one of the fuel stations in Kabale Town, who preferred anonymity for fear of being reprimanded by his bosses, said they were directed to increase the pump prices by Shs100 because their suppliers reportedly encountered transportation challenges.

The prices at Shell and Total fuel stations in Kabale Town on Tuesday was Shs4,170 per litre of petrol and Shs3,760 per litre of diesel.

At Baji filling station, petrol went for Shs3,990 per litre, while that of diesel was Shs3,640.

Several people who Daily Monitor spoke to expressed concern that travellers will bear the brunt of the fuel tax hike, saying transport fares will increase.

“As soon as we increase the pump prices, the tax and bus operators will automatically increase the fares, meaning it won’t affect us but the passenger, the common man,” Mr Badru Koire, a fuel pump attendant at Total filling station, said.

On average, fuel prices in Mbarara City range between Shs3,980 and Shs4,150 for a litre of petrol, up from Shs3,800. A litre of diesel is going for between Shs3,700 and Shs3,750, up from Shs3,450.

Mr Mujurizi Behakanira, fuel dealer in Mbarara City, said: “True, we don’t produce fuel here yet but the government has a hand in ensuring stable prices of fuel.”

Background

Tax on fuel

Last month, Parliament endorsed a raft of government’s proposed taxes in desperate attempts to raise revenue to resuscitate the economy that is suffering from the effects of Covid-19 pandemic.

Under the Excise Duty Amendment Bill, 2021, that was endorsed by Parliament, Motorists will pay a Shs100 tax increase per litre of petrol and diesel.

Government argues that the fuel tax would compensate for the earlier proposed annual road licence fee; Shs200,000 per motor vehicle and Shs50,000 per motorcycle, that has since been dropped.

The fuel tax is expected to fetch an additional Shs196b.

All the new taxes take effect on July 1.

The tax increment will raise the tax on petrol to Shs1,450 per litre and Shs1,130 per litre of diesel.

Source: Monitor

Social
Enable Notifications OK No thanks