Page 18 - DMEA Week 28 2022

DMEA NEWS IN BRIEF DMEA

the Refinery. more money because of the prices of go up to cover up the expenses that are being
Dr James Klutse Avedzi, the Chairman of diesel,” Mr Eriya Erimirwa, the head of the encountered,” he said.
PAC said the information given by the NPA cooperative, told Saturday Monitor, adding, Mr Lakuma forecasts that any switch
CEO was not available to the Auditors at the “This means few members will be able to use to, say, bio-fuels will be met with “severe
time of the audit. this tractor.” consequences.”
The Auditors confirmed the new Mr Boniface Okanya, the commissioner He adds: “Factories can turn food such as
development to the PAC, stating that with the of engineering and mechanisation at corn or sugarcane into fuel, but that would
reconciliation done by TOR and NPA, the MAAIF, said the tractors were meant “to mean people might lack what to eat as they
indebtedness was now GH¢4,648,450.75. increase€¦productivity” but fuel inflation had would be competing with factories. So still
GHANAWEB other ideas. food prices will go up further.”
He added that since it is apparent now that Besides being a majorly agrarian economy,
“farmers won’t be able to use these tractors”, most of Uganda’s population resides in rural
FUELS government interventions in the form of areas.
subsidies for “diesel used for agricultural Mr Richard Ssempala, an economist,
Looming diesel crisis fuels purposes” will be a step in the right direction. says these two factors hold out frightening
prospects in the event that there’s an
Diesel is indispensable to Uganda’s
fears in Uganda economy not least because it powers undersupply of diesel.
generators that provide critical electrical
“For instance€¦matooke, one of the staple
Five months ago, there was cause for power, farm tractors that increase agricultural foods in Uganda, is grown in the central,
optimism when the Tororo Persons Living productivity, construction machines and western and southwestern parts of the
with Disabilities Cooperative received a equipment that build and maintain the crucial country. Transportation of the [matooke]
tractor from the Ministry of Agriculture, transportation and utility infrastructure, as from farms to urban centres requires diesel
Animal Industry and Fisheries (MAAIF). well as trucks that transport food from the fuel. An increase in the price of fuel has an
But instead of thriving in an oasis of hope, countryside to the market. impact on the cost of the final price of the
the cooperative has found itself grappling with Warnings of a looming global diesel products,”
a perfect storm. shortage have become increasingly strident in Mr Ssempala, who is the coordinator of
Mr Osinde Aluka, one of the cooperative’s recent weeks. finance and development at Oxfam Uganda,
leaders, told Saturday Monitor that the tractor With refiners struggling to keep pace says, adding, “It should be noted that most
was originally grounded “because it lacked with rapid post-pandemic demand recovery, Ugandan factories use a significant amount of
some equipment when we got it.” When the an acute global energy shortage€”which imported raw materials. This is supplemented
cooperative got a breakthrough as regards has already sent the prices of gas, coal and with the costs incurred to transport the
to equipment, it immediately faced another crude oil soaring€”has worsened. It is feared finished commodities to the market.”
setback€”the retail price for a litre of diesel that diesel shortages will push up fuel and Mr Ssempala further noted that since “all
had soared from Shs4,000, when the tractor transportation costs (most public service profit maximising firms aim to minimise
was received, to Shs6,000. vehicles or PSVs run on diesel), further production costs, including transport”, they
“At the current prices of diesel, you need tanking the Ugandan economy. will need little invitation to incorporate any
seven litres to till an acre of land,” Mr Aluka “It goes without saying that if the additional costs of production “into the prices
says, adding, “That means going back to our diesel shortage is long-termed, then some of the commodities.”
oxen ploughing, which is cheaper,” he said. factories will have to close,” Mr Corti Paul Following the near-collapse of what many
The steep increase in pump prices has also Lakuma, a research fellow at the Economic observers called a promising industrial
grounded another tractor the MAAIF gave Policy Research Centre (EPRC), grimly sector in the 1970s and early 1980s, Uganda
to the Nsituriraku Cooperative Union in the acknowledges. embarked on a broad range of policy and
eastern district of Buyende. “It’s not easy to adjust from one fuel to institutional reforms.
“We shall have to charge our members another. And of course, prices of goods will The pro-markets policies and

P18 www. NEWSBASE .com Week 28 14•July•2022