Uganda Hit By Fuel Shortage; Prices Double In 1 Wk -Officials

KAMPALA Uganda --Supply disruptions at the Kenyan port of Mombasa have caused a fuel shortage in Uganda, sending local fuel prices skyrocketing by more than 50% in the last week, trade officials said Tuesday.

Ivan Kyayonka, chairman of Shell Uganda Ltd, a unit of Royal Dutch Shell PLC (RDSA), said inadequate supplies from Mombasa, which Uganda relies on heavily for the import of fuel, have caused the shortage.

"The country is experiencing an acute shortage of petrol (gasoline). However, there are some substantial quantities of diesel," he said, adding that repairs on the Mombasa-Eldoret pipeline, a government ban on heavy fuel tankers and an inefficient railway infrastructure are to blame for the supply problems.

Local fuel prices have increased to around 4,000 Ugandan shillings ($2.10) a liter from around UGX2,600 last week.

However, Kyayonka said the company is doing everything it can to normalize the country's fuel supply.

Shell is Uganda's leading fuel supplier, providing diesel and heavy fuels to Uganda's 150-megawatt thermal plants.

Trade officials say the fuel shortage is likely to affect the transportation of commodities like coffee, cocoa and cotton.

As a result of the supply disruptions in Kenya, the Ugandan government is encouraging traders to use the Tanzanian port of Dar Es Salaam to avoid over-reliance on Mombasa.

-By Nicholas Bariyo, contributing to Dow Jones Newswires; +256-75-2624615; bariyonic@yahoo.co.uk