By July 2022, the domestic price for diesel and petrol in Uganda had increased by 71.5 percent and 56.1 percent respectively compared to July 2021. A time when the economy was still struggling to rebound from the devastating effects of COVID-19.
The global energy crisis directly affects local fuel prices and therefore the economy. However, domestic policy actions can influence tax-related costs, distribution, and profit margin but not the international crude oil price. As a result, the Government of Uganda did not intervene to curb the escalating prices.
The policy brief expounds on some of the driving factors for the high fuel prices; implications on the economy; and highlights workable measures for Uganda to cushion the economy from the persistent price shock.