economy 21 October 2026 The Observer (Uganda)
Ugandans Advised to Reduce Travel Amid Soaring Fuel Prices
Ugandans are being urged to curtail non-essential travel and opt for public transportation due to escalating fuel costs, which threaten to increase the prices of essential goods. Petrol and diesel prices have reached approximately Shs 6,800 and Shs 7,000 per litre, respectively. Source: https://observer.ug/news/ugandans-told-to-cut-travel-as-fuel-prices-soar
Ugandans are facing significant financial pressure as fuel prices continue to climb, prompting calls for reduced personal travel and increased reliance on public transport. The Deputy Secretary to the Treasury, Patrick Ocailap, stated that petrol is now retailing around Shs 6,800 per litre, with diesel reaching approximately Shs 7,000 per litre. This surge in fuel costs is expected to have a ripple effect, making food, essential goods, and general transportation more expensive for households already managing tight budgets.
Ocailap attributed the price hike primarily to global market fluctuations and exchange rate pressures, noting that international oil prices have nearly doubled since a major conflict began. As Uganda imports its fuel, these international price increases, compounded by a weakening shilling against the dollar, translate directly into higher costs for importers.
The government also addressed the role of domestic taxes, with Ocailap clarifying that the tax on petrol is Shs 1,750 per litre, a figure he stated represents about 26% of the pump price. He asserted that these fuel taxes contribute to funding crucial public programs, such as the Parish Development Model (PDM).
Furthermore, Ocailap dismissed speculation linking foreign exchange pressures to the proposed Sovereignty Bill, emphasizing that the primary drivers remain global oil prices and the demand for foreign currency to purchase imports. He acknowledged that a substantial portion of the government’s quarterly budget allocation, Shs 10 trillion out of Shs 21 trillion, is dedicated to servicing public debt, a commitment he defended as necessary for financing vital infrastructure projects.
In response to inflation and exchange rate challenges, the Bank of Uganda has adopted a tighter monetary policy, increasing borrowing costs. While this aims to stabilize prices, it presents another hurdle for businesses seeking to expand or operate. For individuals, Ocailap advised a reassessment of spending, suggesting alternatives like using taxis or boda-bodas instead of private vehicles for shorter trips.
The government encourages households to adjust their consumption patterns and farmers to plant fast-maturing crops, while PDM beneficiaries are urged to invest funds productively. The hope is that these collective adjustments will help the economy find a new equilibrium amidst these economic pressures.