Fuel prices – Prime Time Communications

Out to Lunch

#OutToLunch No African country should be land locked

#OutToLunch No African country should be land locked By Denis Jjuuko There has been at least some good news this side of the world. Uganda’s oil is finally set to get out of the ground following the signing of the Final Investment Decision (FID) agreement in Kampala with partners committing to US$10 billion. Procurement of goods and services can now commence. There is a lot that has been pegged to this industry over the last many years and I hope that it realizes its potential and unlike many Ugandan projects, it is delivered on time. There was also the little issue of Rwanda opening its border with Uganda, which has been closed for at least three years. Many Ugandan businesses trade with Rwanda and the reopening of the border is good for both countries and the region. Although I am not sure what was the real reason for the closure, it is good that people can be able to move from one country to another again.Africa is home to 1.4 billion people, the same population as China but there are so many non-tariff barriers in place that hinder doing business. A spat between leaders of countries affects the entire region. Requirements for visas and work permits for countries that all belong to the African Union is a mockery of the body itself. Many times, Africans fly to other countries outside Africa where visas aren’t required or the process isn’t stringent than doing business with the continent. It is easier for a Ugandan to get a visa to Dubai or Turkey than to South Africa. So Africans take their money away from the continent because of such restrictions. Flying in Africa is one of the most expensive in the world and when you look at the air ticket, the biggest percentage of the cost for the ticket goes to taxes. Why do African countries make it so hard to fly from one part of the continent to another? Is it the mentality that flying is for the rich? I know the numbers of people flying might be low but then again isn’t it an issue of cost? If we make flying affordable, people will be able to fly and conduct business with one another. Kenya and Uganda usually squabble over whose goods are contravening regulations in another country. Quality is usually given as an issue though behind the curtain, the argument always goes back to who is benefiting from these barriers. There is always talk of about some of these African countries being land locked and how that curtails their economic progress. In the case of countries like Uganda, that shouldn’t be the case. Mombasa is just about 1,000km away from the Ugandan border and about 1,400km from Dar es Salam. That distance is so little to make a country like Uganda land locked. Investments in infrastructure and reductions in barriers that stop us from trading with each other would make almost no country in Africa land locked or lack a market in the hinterland. Just last month, procedures at the border in Malaba and Busia created an unimaginable fuel crisis in Uganda which will affect the economy for some time. Fuel prices are still high. Most of the tankers coming to Uganda and the region load the fuel a few kilometres away from the Uganda border. Why should they go through border clearance when they arrive at Malaba? Ugandan authorities can ensure that everything the trucker needs is done at the point of loading the fuel and then simply scan or measure at the border and trucks proceed. And this can be done automatically, so trucks don’t have to stop unless if there is a major reason that authorities should check for. Truckers carrying abnormal loads spend a few days at Malaba or Mutukula waiting for the clearance by the minister of transport before they access Ugandan roads. I believe that the construction of the oil pipeline and the central processing facilities will see a lot of importation of equipment and parts that transporters call abnormal loads and if they are all to be cleared by a minister in Kampala, this will delay the oil projects. The country has banked so much on oil that any delays will affect the delivery of the project. We can remove the barriers and make all countries in Africa trade with each other, access the seas and create meaningful jobs. The writer is a communication and visibility consultant. djjuuko@gmail.com

March 9, 2022

Out to Lunch

#OutToLunch Rising fuel prices can be countered by electric vehicles

#OutToLunch Rising fuel prices can be countered by electric vehicles By Denis Jjuuko Fuel is the most common word on people’s lips especially in urban areas where motorized transport is the most used form of movement. Rural areas aren’t spared though. Moving produce to urban areas must be a challenge. Usually, trucks that bring produce to the urban areas return with essentials to the rural areas. Life must be tough everywhere.Some fuel stations in Hoima were said to have sold a litre of petrol at more than Shs10,000. I think this is the first time since the 2007 elections in Kenya where supply lines to Uganda were cut off due to the post-election violence that erupted that fuel has cost as much as or more than Shs10,000 a litre. This time though, the result isn’t a violence after an election rather our approach to testing drivers for COVID-19. Truck drivers went on strike than paying what they considered exorbitant rates.In Kampala this week, in the areas where I live, a litre of petrol is going for Shs5,000 and some didn’t even have. At some stations, people end up buying a litre of the premium types at Shs5,190 or more. Some organisations have advised their employees to work from home given the increasing cost of transport. Although the increment in prices has been solely blamed at the strike by drivers, fuel prices have been on the rise steadily climbing towards the Shs5,000 per a litre mark. I believe regardless of the strike, a litre of petrol will be selling at more than Shs5,000 before the end of 2022. Of the 6.5 million litres of fuel sold in Uganda every day, the majority of it is used in vehicles. This makes everything in the country expensive.Yet there are some solutions that can help address this challenge. Electrified transport especially in urban areas can lower the cost of doing business. This would call for the deployment of electric buses in the city. You need less than Shs50,000 to charge a bus for 300km. The cost of running a diesel bus covering the same distance in an urban area like Kampala is almost three times more than an electric one. Operators of public transport would actually make more money if they went electric. I have listened to testimonies by Kampala boda bodas who are switching to fully electric motorcycles. They say they make Shs11,000 more every day using electric motorcycles than when they used to operate ordinary motorcycles. That is when there isn’t even a single incentive from government to use cleaner cheaper motorcycles. Imagine if there were some incentives! How many public transport operators would be using electric vehicles?If enough reliable public buses were deployed in greater Kampala, many of us would abandon our private vehicles as they are costly to operate. Also, most private vehicles carry on average two people and are parked for the greater part of the day. Lack of parking in Kampala is another issue buses would solve. These buses as we have already seen with Kiira Motors can be locally built thereby not only solving the country’s transport nightmare in urban areas but also creating millions of jobs. Besides public transport, the government should offer incentives for people to buy electric and hybrid vehicles. Such incentives should be in lower import duty and other taxes so that we import less internal combustion vehicles that not only increase the cost of doing business but also destroy the environment. Not so long ago, Kampala was listed among the most polluted cities in the world. This is a result of our reliance on extremely old vehicles in a congested city.Incentives for charging infrastructure would then also be provided such as tax rebates for fuel stations, hotels, and shopping malls that install car chargers. More incentives can be provided for school shuttles and companies that transport students and workers respectively in electric buses. Companies can be encouraged to use electric vehicles for their city movement as well. The government can do the same for vehicles that are mainly used for city movement.The Ministry of Energy and Mineral Development would then introduce an electric vehicle tariff similar to the newly introduced cooking tariff. You pay less for electricity for charging your vehicle. As fuel prices rise, given our generation capacity, the cost of electricity should be going down. Today, a big budget of many households in greater Kampala is on transport. Cars are expensive to buy and service and even more expensive to fuel every day. Money saved from transport would boost household incomes leading to more spending in other areas. That is how economies grow. The writer is a communication and visibility consultant. djjuuko@gmail.com

February 9, 2022