MPs Decry Weakening Shilling and Soaring Fuel Prices

Members of Parliament are sounding the alarm over the Ugandan shilling’s sharp decline against the US dollar and the concurrent spike in fuel prices, impacting ordinary citizens and businesses.

Leader of the Opposition, Hon. Joel Ssenyonyi, highlighted the challenges faced by importers who rely on foreign currency, noting that a weaker shilling escalates their costs. He recalled the Central Bank Governor’s earlier warning that a proposed “sovereignty bill” could destabilize the balance of payments, leading to substantial currency depreciation.

“Government needs to inform us about their strategy to address this situation, as it is causing significant hardship,” Ssenyonyi urged during a plenary session. He also pointed to the volatile fuel prices, with petrol and diesel fluctuating between Shs6,800 and Shs7,000 per liter, creating a burden for many Ugandans.

Despite government assurances that the Uganda National Oil Company would stabilize fuel prices as the sole bulk importer, Ssenyonyi noted that retail prices are still subject to market forces, necessitating government intervention when prices become problematic.

The high pump prices, he explained, have a ripple effect on the cost of essential goods, food, clothing, and even school fees.

Adding to the concerns, Hon. Karim Masaba suggested that the government halt its monthly calculation of import taxes based on the current cost, insurance, and freight (CIF) value. Traders are worried that the rising dollar value will increase their tax obligations to the Uganda Revenue Authority (URA), especially for goods purchased at a lower exchange rate.

Hon. Cohen Amanya echoed these sentiments, noting that while the current high dollar rate is reportedly temporary, it has not improved, further affecting fuel and production costs. He called on the Finance Minister to investigate.

The Deputy Speaker, Thomas Tayebwa, has formally requested statements from the Ministers of Finance and Energy regarding the dollar’s value and fuel prices, respectively.

Source: Parliament of Uganda