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[h=1][/h]Thu Sep 15, 2011 12:45pm GMT
* Says move to increase fuel movement through Tanzania
* Consumes 20,000 barrels per day of petroleum
By Elias Biryabarema
KAMPALA, Sept 15 (Reuters) - Uganda has cut taxes on fuel imported through Tanzania by 15 percent to bolster shipments via a supply route the country wants developed to end chronic shortages, a senior government official said on Thursday.
Landlocked Uganda imports the bulk of its oil supplies through Kenya but industry officials say inadequate capacity at the Mombasa refinery and a pipeline to western Kenya means supplies to Uganda are frequently disrupted.
Information Minister Karoro Okurut told Reuters on Thursday the cabinet had decided in a meeting this week to cut 150 Uganda shillings from every litre of fuel imported via Tanzania.
"Cabinet has authorised the minister of finance to introduce a tax rebate of 150 shillings per litre to an oil company that uses the Tanzanian route," Okurut said.
The Ugandan government currently charges 530 shillings per litre of diesel while a litre of petrol attracts 850 shillings.
"Government would like to develop the southern route because a number of occasions we get congestion and other problems on the Mombasa route," Okurut said
The tax cuts are unlikely to cause a drop in fuel prices because importers have long ignored government exhortations to use the so called southern route through Tanzania, saying it was winding and costlier than going through Kenya.
High food and fuel prices have raised Uganda's year-on-year inflation and they triggered a series of protests in April and May that resulted in several deaths.
The country's year-on-year inflation jumped to an 18-year high of 21.4 percent, from July's 18.8 percent.
Karoro did not say how much of Uganda's total annual fuel supply is currently imported through Tanzania.
It uses about 20,000 barrels of petroleum products per day and a senior official with one of the leading fuel importers estimated that less than 15 percent of this was shipped in via Tanzania.
Uganda struck commercial hydrocarbon deposits in its west along the border with the Democratic Republic of Congo in 2006 and production is expected to commence early next year.
Recoverable reserves are estimated at about 2.5 billion barrels. (Reporting by Elias Biryabarema; Editing by George Obulutsa)
* Says move to increase fuel movement through Tanzania
* Consumes 20,000 barrels per day of petroleum
By Elias Biryabarema
KAMPALA, Sept 15 (Reuters) - Uganda has cut taxes on fuel imported through Tanzania by 15 percent to bolster shipments via a supply route the country wants developed to end chronic shortages, a senior government official said on Thursday.
Landlocked Uganda imports the bulk of its oil supplies through Kenya but industry officials say inadequate capacity at the Mombasa refinery and a pipeline to western Kenya means supplies to Uganda are frequently disrupted.
Information Minister Karoro Okurut told Reuters on Thursday the cabinet had decided in a meeting this week to cut 150 Uganda shillings from every litre of fuel imported via Tanzania.
"Cabinet has authorised the minister of finance to introduce a tax rebate of 150 shillings per litre to an oil company that uses the Tanzanian route," Okurut said.
The Ugandan government currently charges 530 shillings per litre of diesel while a litre of petrol attracts 850 shillings.
"Government would like to develop the southern route because a number of occasions we get congestion and other problems on the Mombasa route," Okurut said
The tax cuts are unlikely to cause a drop in fuel prices because importers have long ignored government exhortations to use the so called southern route through Tanzania, saying it was winding and costlier than going through Kenya.
High food and fuel prices have raised Uganda's year-on-year inflation and they triggered a series of protests in April and May that resulted in several deaths.
The country's year-on-year inflation jumped to an 18-year high of 21.4 percent, from July's 18.8 percent.
Karoro did not say how much of Uganda's total annual fuel supply is currently imported through Tanzania.
It uses about 20,000 barrels of petroleum products per day and a senior official with one of the leading fuel importers estimated that less than 15 percent of this was shipped in via Tanzania.
Uganda struck commercial hydrocarbon deposits in its west along the border with the Democratic Republic of Congo in 2006 and production is expected to commence early next year.
Recoverable reserves are estimated at about 2.5 billion barrels. (Reporting by Elias Biryabarema; Editing by George Obulutsa)
