Fuel prices have shot up in recent weeks across UgandaRecently, there have been increasing calls on the government of Uganda to intervene directly into the petroleum market including by way of setting caps to control prices of petroleum products.This comes as fuel prices continue skyrocketing over the last two months in response to global supply disruption, despite the Ministry of Energy and Mineral Development stressing that there are still enough reserves in Uganda for the next several days.While in and around Kampala prices now range between 5,440 and 6,100 per litre of petrol and between 5,000 and 5,500 for diesel depending on the filling station, there are reports of a litre going for up to 10,000 in some countryside towns.One of the top two marketing companies has had no fuel, especially petrol, at its stations for some days now, claiming depletion of its reserves. Just a week ago, the Ministry said that there were 70.5 million litres of petrol, enough to take the country for the next 19 days, diesel, 43.2million litres for 12 days and for jet fuel, 32 million litres, enough for 53 days, while more fuel was expected to arrive in May and June.This sounded good for the country, but not enough to calm the fears by users. But it also raised allegations and conclusions that, therefore, the high fuel prices are uncalled-for and artificially caused by the marketers to profit for the global uncertainties.This is the reason, some are calling for the government start setting price caps, and /or subsidise costs and as well as halt the planned new tax increases on the products in the next budget (2026/2027).Kenya and Rwanda, for example, maintain a direct price control for fuel products, issuing maximum prices on a monthly basis. Earlier this month, Kenya’s Energy and Petroleum Regulatory Authority increased to cap to 206.97 Kenya shillings (UGX 5,945) for Petrol, while Rwanda Utilities Regulatory Authority set it at 2,938 francs (UGX 7,480).In both these cases, the prices are clearly far higher than in Uganda, which has maintained a “free-market” economy, allowing prices to be controlled by demand and supply, rather than a government directive. Some of those who have suggested price controls like Jamil Mujuzi, a Professor of Law at the University of Western Cape, South Africa, cites the regime in that country where prices are adjusted monthly.He says this gives consumers and the economy generally, predictability.Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury, says price regulation distorts the market and the whole economy, especially if it touches essentials like food and fuel.“The answer is not price controls, but stability: strong macro policy, efficient supply via the National Oil Company, and competition,” he says, adding, “Markets keep fuel flowing, controls create shortage. Those who try to profiteer do not last long; competition will correct them sooner or later.”The government has attributed the relative supply stability and prices to the activities of UNOC, which imports fuel directly from the source markets, rather than the country’s marketing companies getting supplies through middlemen companies in Kenya as was happening two years back.Recent media reports showed that some motorists in the western parts of Kenya were crossing into Uganda to purchase fuel, as it is readily and cheaply available.There were also reports that Kenya had requested Uganda to access the Ugandan fuel reserves to tame the rising scarcity at home, a request Uganda declined.Minister Ruth Nankabirwa says that by now, prices would be more than 8,000 shllngs, adding that the ministry also keeps in touch with the marketing companies to ensure that price increases are not drastic and irrational.The government has also rejected calls to suspend the new tax increases that have now seen excise duty on 1,750 per litre for petrol and UGX 1,430 per litre of diesel starting next financial year, a rise of UGX 200.The Minister of Finance, Planning and Economic Development says the excise duty is a year-long decision and cannot therefore be used to solve a short-term issue of the current price increases.State Minister Henry Musasizi adds that a UGX 200 increment is too small to have an impact on prices, yet the government needs revenues for the budget.-URNThe post Calls For Uganda To Control Fuel Prices Grow, But Gov’t Says A Free-Market Economy Is The Best As “Controls Create Shortage” appeared first on Business Focus.