KAMPALA, Uganda — Uganda’s Parliament has passed a contentious tax measure that will increase the cost of fuel and several essential goods, in a move aimed at boosting government revenue amid mounting fiscal pressures.
The Excise Duty (Amendment) Bill, 2026 introduces a Shs 200 excise duty per litre of fuel, alongside higher levies on sugar, cement, alcohol and motorcycles.
Once assented to by the President, the law will raise excise duty on sugar from Shs 100 to Shs 300 per kilogram, cement to Shs 750 per 50kg bag, imported spirits to Shs 3,500 per litre or 80 per cent (whichever is higher), and motorcycles at first registration from Shs 200,000 to Shs 500,000.
Government officials say the tax changes are necessary to shore up public finances.
“If we pass this proposal, it will give us Shs 450 billion. If we don’t pass it, we are forfeiting Shs 450 billion. We are in this to look for revenue to finance the budget,” said State Minister for Finance (General Duties) Henry Musasizi.
“You cannot say that what is happening in Iran now can be the basis of our making decisions here.”
The parliamentary finance committee supported the measure, arguing that Uganda’s bulk fuel procurement system could cushion consumers from sharp price increases.
However, opposition lawmakers warned that the additional costs would ultimately be passed on to households and businesses.
A minority report led by Kira Municipality MP Ibrahim Ssemujju urged Parliament to scrap the levy or reduce it to Shs 50 per litre.
“Fuel prices are already high and are expected to increase further as a result of geopolitical tensions in the Middle East. As of this morning, the pump price has hit Shs 5,500 per litre,” Ssemujju said.
“The IMF and World Bank have said even if the war in the Middle East stops, it will take a whole year for oil prices to stabilise.”
The Institute of Certified Public Accountants of Uganda also recommended a more gradual, inflation-linked adjustment to avoid economic strain.
Uganda consumes between 3.5 and 6.5 million litres of petroleum products daily and relies entirely on imports, making it highly sensitive to global oil price shocks.
Analysts warn that even modest tax increases could have ripple effects across the economy, raising transport, production and food costs at a time when inflation remains a concern.
Fuel prices are already elevated, averaging around Shs 5,400 per litre for petrol and Shs 5,090 for diesel nationally, with higher prices recorded in urban centres and border regions.
Authorities have sought to calm fears of shortages, saying national fuel stocks remain stable despite global market uncertainty linked to Middle East tensions.
In a joint statement, the Uganda National Oil Company and the Ministry of Energy and Mineral Development said current reserves remain sufficient when combined with incoming shipments.
“Current stock levels as of April 20 stand at 70.5 million litres of petrol (19 days’ cover), 43.2 million litres of diesel (12 days’ cover), and 32 million litres of jet fuel (53 days’ cover),” said UNOC corporate affairs chief Tony Otoa.
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Although these levels fall below the statutory 21-day reserve requirement under the Petroleum Supply Act, 2024, officials expect significant replenishment in the coming weeks.
Shipments scheduled between May and June, including 183 million litres of petrol and 258 million litres of diesel, are expected to stabilise supply.
Uganda’s imports are routed primarily through Kenyan and Tanzanian ports under a supply arrangement with Vitol Bahrain E.C., which has delivered more than 2.6 billion litres since 2024.
“Sufficient stocks and incoming deliveries secure Uganda’s supply,” Otoa said.
The tax increases come at a delicate moment, as governments across Africa balance revenue mobilisation with rising public frustration over the cost of living.
While authorities maintain that the Shs 200 fuel levy is modest, economists caution that cumulative tax pressures, combined with global oil volatility, could amplify inflationary risks in the months ahead.
