Saturday, November 22, 2008
Kamander Bataringaya, minister of state for energy in charge of minerals told reporters that freight charges have gone up due to the increased risk of petroleum tankers being hijacked by pirates in the Gulf of Aden.
He said the insurance premiums for the tankers have also gone up which has forced dealers to pass the cost pressures on to the consumers.
Pump prices especially in the capital Kampala have been unstable in recent weeks with the highest being 2,850 shillings (1.6 U.S. dollars) for a liter of petrol.
Other factors pushing up the prices include depreciation of the local currency against the dollar, increase in transit truck charges due to the three axle weight limitation introduced in Kenya.
Uganda imports and exports all its products through the Kenyan sea port of Mombasa because it is land locked.
Analysts have warned that prices of basic consumer goods are also expected to increase as shipping operators opt for alternative routes to avoid the pirate-infested waters.
Piracy off the coast of Somalia has been on the increase affecting the shipping route, the world's busiest trade route, linking the Middle East and Asia to Europe and beyond through the Suez Canal.
Source: Xinhua, Nov 22, 2008