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CRUDE OIL BLAMED FOR ESCALATING COMMODITY PRICES

By Chris Frank

HOIMA: The government of Uganda has attributed the escalating prices of essential commodities being experienced in the country to the current interplay of both local and international factors including high crude oil prices and the covid-19 pandemic.

Prices of fuel, Soap, Cooking oil, Sugar, Salt and other essential commodities have remained high for weeks in Uganda and across the Bunyoro Region causing inflation and discontent in the population affected by the hike in the cost of living.

The Member of Parliament for Hoima City Nyakato Asinansi speaking to ugreports Tuesday morning said that the covid-19 pandemic, the increase in crude oil and palm oil prices, and the Russia-Ukraine War, are to blame for the current predicament the citizens are in.

According to the statement issued, Nyakato says the Covid-19 pandemic caused a huge disruption in the supply chain of essential items and raw materials which after the lifting of lockdown measures culminated into increase increased aggregated demand but with limited supply.

The politician says this situation of scarcity, precipitated by the grand re-opening of schools resulted in increased demand and eventually spiked prices of most items.

The external factors on the other hand are the increase in prices of crude oil on global market by more than 70 percent between January 2021 and February 2022, and the recent border delays suffered by fuel transporters which subsequently led to an increase in domestic pump prices.

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She also noted that the increase in palm oil prices which has almost doubled in key producing countries -Malaysia, Indonesia and Brazil, should be blamed for the increased price of cooking oil in Uganda.s

Besides, the ongoing Russia-Ukraine war which puts pressure on the local sunflower oil, freight costs that have since the start of the Covid-19 pandemic gone up by over 200 percent.

Ukraine and Russia are the top sources of sunflower oil in the world, with the former accounting for 46 percent of the exports while the latter accounts for 23 percent.

Nyakata says, the war has created a lot of speculation in the trade fraternity as most traders have resorted to hounding which has created supply shortage yet demand remains high and thereby pushing commodity prices up.

According to the statement, the government of Uganda remains committed to taking decisive measures to easing domestic supply constraints and preventing further escalation of commodity prices.

Government is also actively engaging key stakeholders and agencies to curb any domestic hounding practices that are contributing to the current high prices.

Do you have a story in your community or an opinion to share with us? Email us at editorial@ugreports.com

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