Uganda’s Fuel Prices Remain Lower Than Regional Peers Despite Global Oil Surge
Fuel prices across East Africa have surged sharply in recent weeks, driven by global supply disruptions and rising crude oil prices that have stayed above $100 per barrel.
Despite these upward pressures, Uganda remains slightly cheaper at the pump compared to several neighboring countries, even though it is a landlocked nation heavily reliant on imported fuel via Kenya.
A regional comparison indicates that petrol in Kenya averages about Shs5,871 per litre, with diesel prices similar. In Uganda, petrol currently costs around Shs5,244 per litre, while diesel is approximately Shs5,085.
However, in parts of Kampala, prices have reportedly climbed to around Shs5,600.
Rwanda’s fuel prices stand at roughly Shs5,814 for petrol and Shs5,558 for diesel, whereas Tanzania records averages of Shs5,415 for petrol and Shs5,387 for diesel.
Ethiopia’s prices are notably lower at about Shs3,363 for petrol and Shs3,848 for diesel, and Burundi’s averages are around Shs4,959 for petrol and Shs4,874 for diesel.
The recent regional price hikes are largely attributed to global supply shocks, especially heightened geopolitical tensions in the Middle East since late February 2026. These tensions have disrupted oil production and shipping routes, notably through the Strait of Hormuz, a critical chokepoint for global oil trade.
Additionally, increased freight and insurance costs have further contributed to higher fuel prices for importing countries.
Uganda’s comparatively lower pump prices have been partly credited to structural reforms in its fuel importation system. In 2024, the government enacted the Petroleum Supply (Amendment) Act, 2023, which granted the Uganda National Oil Company (UNOC) exclusive responsibility for fuel imports.
This move reduced reliance on Kenyan intermediaries, who previously handled much of Uganda’s fuel imports and were criticized for adding extra costs through middlemen margins. Under the new system, Uganda sources fuel directly from international suppliers through long-term agreements, while still utilizing regional infrastructure for transportation.
Taxation policies also influence regional fuel prices. Kenya imposes relatively higher taxes, including a 16 percent Value Added Tax (VAT), along with excise duties and other levies, significantly increasing retail prices.
Uganda’s tax regime, in comparison, is lower, helping to cushion consumers from the full impact of global price fluctuations. Rwanda’s fuel pricing is heavily regulated, with the government periodically setting maximum prices and sometimes subsidizing to stabilize the market during global spikes.
Ugandan authorities have assured the public of a stable fuel supply, noting that additional shipments are expected to bolster reserves.
UNOC confirmed that approximately 119 million liters of fuel were scheduled to arrive via Mombasa on Wednesday to strengthen national stocks. “This shipment will further boost our fuel reserves and ensure continued availability across the country,” UNOC stated.
These developments underscore how global market forces, taxation policies, and national procurement systems together influence fuel price variations across East Africa.
