The Uganda National Oil Company (UNOC), is projecting further remission in Ugandan pump prices, on the back of falling international prices for crude and stable stocks of refined products in the domestic market.
According to officials, global prices for crude have continued to fall in recent weeks, a development that is expected to manifest in the local market through lower pump prices. Further, adequate product stocks of petroleum products in the market have stabilised the supply side, eliminating the sharp price fluctuations that have characterised the market in the past.
Analyses by UNOC show a 6.6% reduction during the second half of 2024, with the pump price for petrol, falling from Ushs 5300 in July 2024 to Ushs4950 at the end of December 2024. Across the country, prices averaged Ushs 4,857 for petrol, and 4608 for diesel in January 2025.
“Global prices are going down and the Platts (the price at which oil traders buy from oil refineries) are also coming down. So, we are going to see a reduction over the next couple of months,” says Mr Tony Otoa, the Chief Corporate Affairs Officer at UNOC.
For the first time, pump prices in Uganda are either lower or at par with Kenya, a transit country for Uganda’s oil imports. According to the Kenya Energy and Petroleum’s tariff for the month running from April 15,2024 to May 14, 2024, the pump price for petrol in Nairobi is set at Kshs 174.63, which is equivalent to Ushs 4977. In Malaba, Kenya the pump price is the equivalent of Ushs 5,014, something which has seen Kenyan motorists turn to filling up their tanks in Uganda.
According to the United State Energy Information Administration, (EIA) prices for Brent crude fell 14% from April 2, to $66 per barrel on April 7, after President Trump announced retaliatory tariff across the board, causing significant volatility in the market.
But while the agency expects that prices for crude oil and other commodities will continue to experience volatility as market players assess the impacts of US trade policies; global oil inventories are set to start to increase by mid-2025 as OPEC+ members unwind production cuts, concurrent with increases in production by non-OPEC countries. As a result, the Brent crude oil price is projected to average $68/b in 2025, before falling further to an average of $61/b in 2026.
The EIA’s forecast comes as UNOC, which was mandated to takeover importation of Uganda-bound petroleum products in 2023, and landed its first consignment in July 2024, consolidates its position, with an accent on assuring supply stability. The company landed more than 1,9 billion litres of fuel products in the nine months to March 2025, according to Aron Bukenya, UNOC’s Trading Specialist.
“Pump price stability in the Ugandan context is a function of two things – supply and the exchange rate. And if there is one thing we have achieved, it is stability of product stock in the market,” says Otoa.
“We have worked on alternative routes; the primary one in through Kenya and another through Tanzania, to ensure supply continues in case of hiccups on any of them.”
UNOC says direct importation of products, eliminating middlemen, to deliver products directly to oil marketing companies in Uganda, has delivered multiple dividends. It has minimized the risk of shortages and smoothened out price volatility, ensuring a steady flow of fuel into the country. Consumers have benefited from stable pump prices, allowing businesses and individuals to plan their expenses more effectively.
At the marketer level, it has created a level playing field, especially for small Ugandan retailers, who previously depended on their competitors to get stock.
Meanwhile, for the local banking sector, payments for petroleum products purchases from UNOC through the Ugandan banking system, rather than Kenyan financial institutions has shored up their stocks of dollars, adding another layer of stability to the exchange rate.
“Everybody is happy. The banks are happy, the oil majors are happy, and the small players are also happy. The profile of Ugandan participation in oil marketing is also rising thanks to the new market structure introduced by UNOC,” Otoa adds.
UNOC was granted the mandate to be the sole importer of petroleum products in Uganda in November 2023, promising reductions in pump prices, security of supply and revenue generation to reduce the burden on the national treasury.
This followed a separate agreement under which Bahrain-based Vitol would team up with UNOC, to exclusively handle importation of all of Uganda’s petroleum products. The deal aimed to lower fuel prices by eliminating the old system, under which Uganda relied on Kenya-based private outfits to source petroleum products.
The move was also intended to build UNOC’s capacity to manage sales of refined products from Uganda’s oil refinery when domestic oil productions starts.
