Uganda fuel prices face asymmetric price transmission

Fuel prices in Uganda exhibit a phenomenon known as asymmetric price transmission, where retail costs rise rapidly following increases in global crude oil prices but fail to decrease significantly when wholesale costs drop. This mechanism, described as a ‘ratchet’ effect, creates a higher baseline for local pump prices over time.

Fuel distributors often cite factors such as expensive old stock, fixed overheads, and exchange-rate losses to justify delaying price cuts. This trend functions as a continuous economic burden on various sectors, including transportation, agriculture, and manufacturing, effectively acting as a silent levy on the Ugandan public.