The government will not reduce taxes on fuel or provide subsidies for other essential commodities which are experiencing run away price increases, President Yoweri Kaguta Museveni has said.
While addressing the nation last evening, Museveni said the lasting solution to the current high prices of petroleum products lies in Uganda embracing electric cars, motorcycles and the use of trains.
He added that by reducing taxes Museveni, the government would be providing a wrong solution to the problem which he attributed to among others the ongoing war between Russia and Ukraine and to the decision by much of the Western world to start moving away from fossil fuels.
“When this was passed as declaration, the oil companies which were looking for petroleum stopped because petroleum will be phased out. Because of no more exploration, the little fuel, that is there is very expensive. The high prices come from the worry of banning petroleum products because there is no more exploration,” Museveni said adding that even if the war ends, the prices are likely to remain high.
“The correct way is to start moving away from petrol to electric cars and using the railway for transport especially of cargo. This is the solution to go for. The good thing we have started manufacturing electric buses here. They need Shs 20billion to make more buses at Kiira. The correct way instead of spending money to subsidise the mistakes we should put it in getting out of the mistake,” says Museveni.
Since the beginning of the year, the prices of fuel have been steadily increasing at one point jumping beyond Shs 10,000 in some places across the country. Currently in Kampala, petrol buys between Shs 6500-7000 a litter. Even the prices of diesel which is mostly used in cargo transportation vehicles has been on an upward spiral sometimes overtaking petrol in being expensive.
On the high prices of cooking oil and other products, Museveni still blamed external factors that he said interrupted the global flow from countries such as Malaysia and Indonesia which are some of the biggest producers of palm oil.
As a solution, Museveni said, his government is going to intensify its promotion of palm oil growing in areas such as Kalangala, Buvuma and Maruzi.
“There is a difference between high prices and shortage; if you subsidize this danger, people will continue buying more and more because you will have created an artificial comfort for them to think things are normal yet they are not normal. Therefore, the mistake of subsidies and tax cuts are two; you mislead people not to know that the situation is bad and also kill their ability to economize.
In the end, you might transform the high prices into shortages. So, instead of the money being put in subsidizing the present mistake, we would rather put the money into a safer way; so we are building more capacity for our palm oil,” says Museveni.
