Fuel prices in Uganda up 1.61%

Fuel prices in Uganda have surged by 1.61% from Sh4,980 to an average of Sh5,060 per litre, sparking concerns about the potential inflationary impacts and broader economic disruptions. According to analysts, these price hikes are driven by global and regional factors such as geopolitical tensions, oil production cuts by OPEC countries, and the stabilization of the cost of the barrel at $80. To shed light on the causes, impacts, and potential outlook of these fuel price changes, CNBC Africa interviewed Wilson Manishimwe, a Policy Analyst at Corporate Image Limited. Wilson highlighted the trickle-down effect of fuel prices on various sectors of the economy, including manufacturing, transportation, and general merchandise businesses. He pointed out that increased operational costs due to higher fuel prices are likely to lead to higher prices of goods and services, contributing to a rise in inflation rates. Wilson also discussed the potential policy interventions to stabilize fuel markets and mitigate economic disruptions. While some countries like Kenya have attempted to regulate petroleum product prices through subsidies, Wilson argued that market forces should predominantly determine the cost of fuel in Uganda. Looking ahead, Wilson suggested that fuel prices could potentially decrease if international costs, especially the cost of oil barrels, are subsidized. However, the exact timing of this reduction remains uncertain, making it crucial for investors to carefully monitor energy market trends. Overall, the conversation with Wilson Manishimwe reflects the complex interplay between global dynamics, government policies, and market forces in shaping fuel prices and their wider economic ramifications in Uganda.