{{Uganda has announced prices of its locally produced Oil which will cost a conservative fee of $70 per barrel.}}
With a barrel having 159 litres, the set price means that a litre of Uganda’s crude oil has been set at $0.4 cents.
The announcement was made by Uganda’s Permanent Secretary in the Ministry of Energy and Mineral Development, Mr Fred Kabagambe-Kaliisa.
Dr Frederick Kisekka-Ntale, a political researcher in Uganda said, “We may begin at a point of indebtedness; the cost of paying back the loan [for building refinery] will eat into the cost of production hence driving the cost at the pump higher.”
The Ugandans are watching closely neighbouring Kenya Oil sector.
Dr. Kisseka explains that; “All these costs will be borne by the consumer and so by the time we will build our refinery and Kenya has started production, Kenya oil may be cheaper than ours and it is not a paradox because it has happened in other African oil producing countries.”
Crude oil is currently trading at $88 per barrel on the world market. The highest crude oil price ever was in July 2008 when it traded at $147 a barrel while the average price for a barrel of crude oil between 2005 and 2010 was about $67.
World crude oil prices fell in December 2008 to $30 a barrel, the lowest since the financial crisis of 2007–2010 began, and traded at between $35 and $82 a barrel in 2009 before hitting $100 a barrel in October 2008.
{Additional Reporting NMG}
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