The price of petrol at the pump has risen between Shs30 and Shs50 per litre in the last eight days or more.
It rose from Shs4,270 to Shs4,310 at fueling stations such as Total and Shell while Petro and others are selling at an average of Shs4,250.
A litre of diesel has slightly risen to between Shs20 and Shs40 with the price increasing from Shs3,970 to Shs3,990 in the same period.
The price increase, according to Mr Peter Ochieng, the Hashi Energy regional general manager, could be a result of a supply hiccup that had been caused by a temporary halt in the loading chain at the Nairobi and Mombasa port depots.
However, he said, this had been resolved and loading had by last week resumed normally.
Additionally, according to analysts, the recent implementation of the 16 per cent value added tax on petroleum products in Kenya could have caused heightened speculation.
Currently, petrol is retailing at Shs4,730 per litre in Kenya following the implantation of the 16 per cent tax.
However, Rev Frank Tukwasibwe, the commissioner petroleum supply, at the Energy ministry, said the 16 per cent tax in Kenya was a domestic issue and had nothing to do with Uganda.
“If there is an increase in VAT in Kenya, it is something to do with Kenya. That effect is on their local products and not on transit products,” he said, explaining that the movement could be a result of the volatility in the exchange rate market.
“When you look at a nominal increase whether it is Shs50 or Shs100, look at the impact on the exchange rate. If it has remained stable, then one can ask the regulator what is happening. But if things are changing, the reasons are obvious because fuel is bought and transported in dollars and sold here [Uganda] in shillings. If there is a change in the exchange rate between the dollar and shillings, certainly that effect would be reflected,” Rev Tukwasibwe said.
The shilling has in the last one month shown signs of stability not withstanding that it had for almost three months experienced severe volatility. The unit is currently selling at Shs3,792 against the dollar.
Between June and July, the shilling faced some of its worst volatilities, depreciating by almost 5 per cent, capping a depreciation rate of about 7.9 per cent since the beginning of the year.
Efforts to reach large fuel retailers – Vivo Energy and Total – were futile.