UNOC’s fuel storage tanks/Courtesy photoBy Prisca WanyenyaThe Uganda National Oil Company (UNOC) has attributed the current hike in fuel prices to Parliament’s Shs200 excise duty levy per litre, depreciation of the shilling against the dollar, and global supply disruptions caused by wars in the Middle East and between Russia and Ukraine.UNOC Chief Executive Officer Proscovia Nabbanja made the revelation while appearing before the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on October 7, 2026, during consideration of the December 2025 Auditor General’s report.“So, the supply is not a problem as of today, because we have managed the supply chain with our global partner. What is constraining what we have observed, at least from the market, are two critical things. Number one, of course, you are well aware, that there was an additional duty of Shs200 effective this financial year. This inherently has to be built into the cost of petroleum products,” Nabbanja said.“Then number two, the depreciation of the Uganda shilling has also impacted on the pricing of petroleum products, because if you put yourself in the shoes of the oil marketing company, the amount of money or dollars you require for replacing the volume that you are selling today is more compared to what we were seeing before, when the shilling was slightly stronger,” she added.Nabbanja was responding to Kyadondo East MP Muwada Nkunyingi, who is also COSASE Chairperson, who tasked her to explain the price escalation and whether Uganda should liberalise fuel importation. “I am aware that now the price has escalated. What happened with the importer as a preliminary matter? What has occasioned this? Should we open up? Is there a need to open up and other importers import fuel so that we have enough on market?” Muwada asked.Nabbanja said UNOC’s mandate is to ensure security of supply, competitive pricing, generate revenue and reduce the burden on the treasury, but noted this was being undermined by factors beyond its control.“We are all aware of what is happening in the Middle East, the geopolitical choke points that we see through the closure of the Strait of Hormuz due to the war in the Middle East, and that has also been exacerbated by the attacks on the pipelines, that have also caused transit risk through the Red Sea. Coupled with that is the attacks on the major refineries in Russia,” she said.She noted that when the Middle East conflict escalated, most countries reverted to their strategic inventories, causing a spike in petroleum prices.“But now those strategic stocks are getting depleted globally. Even while the G7 countries have tried to put back on stream about 100 million barrels of both petroleum products and crude, still the refineries are constrained because most of the attacks are going to the refineries,” Nabbanja said, adding that China and Russia had decided to domesticate their refined products.UNOC said Uganda is not facing fuel scarcity. The company has a supply contract with a global player sourcing products from Europe and the Far East, away from the Middle East.She told Parliament that Uganda currently has stock cover of 70 days for petrol, 57 days for diesel and 85 days for jet fuel. This includes stocks in the Kenya Pipeline Company system, Tanzania route, transit, Mahathi, Jinja Storage Terminal and lined-up vessels expected until November 2.“Unfortunately, all these things are happening at a time when there is that perfect storm. The global narrative of what is happening globally is not helping at all. At least what we try to do as a national oil company is to ensure that the supply continuity is guaranteed. But nonetheless, we are in a high-price environment globally because of the limitations that we have, but that is also exacerbated by the additional duty and, of course, the depreciation of the Uganda shilling against the dollar,” Nabbanja said.Muwada, however, doubted that the Shs200 levy alone explained the price hike, arguing the pump price increase was higher than Shs200.“Now to a final consumer, you cannot convince a final consumer because if we compute from the previous prices and the current prices, the difference is not Shs200 and it cannot be understood well within the depreciation,” he said.He also questioned reports of empty fuel stations despite UNOC’s assurance of sufficient stocks.“But it is also true that when you move to some of the Ugandan petrol stations, they don’t have fuel. Now, are you hoarding this or distributing with a specific consideration?” Muwada asked.Nabbanja said UNOC would investigate.“You have highlighted the issue of some of the petrol stations not having fuel. We may have to double check on that because, at least as far as we know, there is enough stocks in the system. We will have to check and assure ourselves why that particular oil marketing company is not off-taking a product from the supply system,” she said.She added that while UNOC offers a uniform price to all oil marketing companies, retail prices vary.“We have seen the industry majors like Total and Vivo Energy slightly higher than the rest. And yet, as a national oil company, we give a uniform price to all the oil marketing companies. There is going to be deviations depending on the oil marketing company and depending on the price build up that they give,” she said.On April 21, 2026, Parliament approved government’s proposal under the Excise Duty (Amendment) Bill, 2026 to increase tax on petrol and diesel by Shs200 per litre to raise Shs450 billion for the 2026/27 budget.The then Minister of State for Finance, Henry Musasizi, defended the levy, arguing that government could not base its tax decisions on the war in Iran.“You cannot say that what is happening in Iran now can be the basis of our making decisions here. Because we don’t have control over them. We don’t know when this war will end,” Musasizi said at the time.The Finance Committee chaired by Amos Kankunda (Rwampara County) supported the levy, arguing that with pump prices averaging Shs5,400 per litre at the time, the Shs200 increase was relatively small and would be cushioned by UNOC’s direct sourcing through Vitol Bahrain E.C.The Opposition, led by Ibrahim Ssemujju (Kira Municipality), opposed the levy, proposing a Shs50 increase to account for inflation instead. The minority report, co-authored by Karim Masaba (Mbale Industrial Division), Hanifah Nabukeera (Mukono Woman MP), Brenda Nabukenya (Luwero Woman MP), Anna Adeke (Soroti Woman MP) and Geofrey Ekanya (Tororo North), warned that fuel demand is inelastic and any tax increase would be passed on to consumers.“Fuel prices are already high and are expected to increase further as a result of geopolitical tensions in the Middle East. Since energy drives other activities, the cost of doing business in Uganda will become high and difficult to contain,” Ssemujju argued.The group cited the Institute of Certified Public Accountants of Uganda (ICPAU), which had advised that any increase should be limited to Shs50 per litre to cover inflation, raising the levy to Shs1,600 for petrol and Shs1,280 for diesel.The post UNOC Blames Shs200 Fuel Levy, Weak Shilling for Pump Price Surge appeared first on Business Focus.