Fuel prices in Uganda are fluctuating between 6,300 and 6,700 shillings per litre for both petrol and diesel, creating a persistent drag on the country's inflation outlook.
The volatility in energy costs is identified as the primary driver behind elevated average prices for goods and services in the second quarter, according to reports from AllAfrica.
The central bank faces mounting pressure to contain inflationary pressures as transport costs remain stubbornly high.
The oscillation in fuel prices prevents businesses from stabilizing their pricing models, leading to broader cost-push inflation across the economy.
This dynamic mirrors warnings issued by other regional central banks, such as the Bank of Ghana, which has highlighted that rising transport and haulage costs could further accelerate inflationary pressures across the economy.
Global geopolitical tensions continue to exert upward pressure on energy markets, complicating the outlook for import-dependent economies.
The Bank of Ghana recently warned that renewed geopolitical tensions in the Middle East and persistent volatility in global oil prices pose a significant threat to the country’s inflation outlook. Uganda, as a net importer of refined petroleum, is similarly exposed to these external shocks, which limit the effectiveness of domestic monetary policy in isolating the economy from global price swings.