Thursday, March 6, 2008



John Eremu
New Vision, Uganda

They also added this comment:
"This is one of the editorials that I wrote and was published January 3, 2008"

Fuel crisis could have been averted

UGANDA is experiencing one of its worst fuel crises in recent history. The crisis, sparked off by post-election violence in Kenya, Uganda’s gateway to the sea, has not only exposed our vulnerability to any turmoil in Kenya, but also showed lack of pro-active planning by the concerned authorities.

Uganda early last year experienced a similar fuel shortage, though to a lesser extent, simply because no precaution was taken when Kenya announced a change in their tax regimae.

It was obvious that the new measures would destabilise supplies for sometimes.

It is also obvious that any election in a third world country creates tension that usually leads to hoarding of supplies.

The break up of the NARC alliance and the decision by Raila Odinga to stand against Mwai Kibaki were all pointers that the Kenyan election would be chaotic.

The responsible department should have therefore, taken the necessary precaution to mitigate any disruption in fuel supplies.

Even under the liberalisation policy, Uganda should have a national oil reserve to stabilise fuel prices in times of crisis like now.

Perhaps it time to rethink whether strategic resources like fuel, should be entirely left in private hands.

Oil has a ripple effect on the entire economy. In less than three days of the shortage, pump prices have more than quadrupled, sending transport fares sky-rocketing.

Food prices will soon soar and the manufacturing sector will soon feel the brunt as continued fuel shortage will affect thermal power generation, further pushing up the already high power tariffs.

All fuel companies are supposed to have reserves to last 10 days, but apparently this condition is not being enforced.

The responsible ministry should immediately seek the possibility of speeding up the exploitation of Uganda’s oil reserves sooner than the planned exploitation period of June 2009.

The Kenyan experience should be an eye opener that we need an alterative route to the sea.

The Government should ensure that Uganda has a national fuel reserve to absorb short-term shocks.

It is a shame that a one-week disruption in fuel supply can result into a crisis of this magnitude.