The rebate for fuel transit through Tanzania is politically motivated

Both the Monitor and Newvision have recently carried stories about Uganda government’s imminent intent to introduce a tax discount of Shs150 per litre to fuel dealers who will import their fuel through the Tanzanian route, instead of the normal route through Kenya (see map). Although government is ascribing this discount to the need to lower fuel prices, business analysts agree that such a rebate would not reduce pump prices.

It’s a fact that the 1800km Kampala-Dar-es-salaam route is 600km longer than the Kampala-Mombasa route. With a despicable road infrastructure in Tanzania compared with that of Kenya, fuel deliveries along the Dar-Kampala route could be at least four days slower than the usual Kampala-Mombasa route.

In any case, a few traders who have tried the Dar es salaam-Kampala route complain of too many non-tariff barriers in form of weighbridges. While Tanzanian officials have indicated they would be willing to reduce these, there are no guarantees for such an action, given Tanzania’s reluctance to fully embrace the East African Community protocol.

For these reasons, major oil dealers in Uganda have conservatively estimated that importation of fuel though Tanzania will hike transportation costs by as much as four times compared with what they currently incur through Kenya. They have also indicated that the government’s proposed rebate of shs 150 per litre hauled through Tanzania would not offset the envisaged hike in transportation costs. By implication then, ordinary Ugandans would naturally brace for even higher petrol, diesel, and paraffin prices as clearly – which is contrary to what to the government’s argument.

Of course, over-reliance on a single route – which actually accounts for haulage of 99% of Uganda’s estimated four million tons of seaborne traffic is a risk factor. It may be recalled that in the fallout following the 2007 disputed presidential elections and the ensuing electoral violence in Kenya, ordinary Mwananchi in western Kenya uprooted rail racks, blockaded the Kenya-Uganda highway, and burnt or vandalised or looted cargo trucks destined for Uganda. It became apparent that such a rare rant was precipitated by Museveni’s rushed and congratulatory message to Mr Mwai Kibaki, who had widely been perceived to have grossly rigged the 2007 elections for his second and last constitutional term as President of Kenya. Western Kenya, from where Raila Odinga hails, and the man Kibaki had rigged out, was incensed that Museveni and Uganda by association could be that treacherous, hence the targeting of Ugandan interests.

With Mwai Kibaki’s last term of office set to expire in about a years’ time; and given that Raila Odinga is the likely next president for the Republic of Kenya, would it be logical to say Museveni’s government is simply trying, at all costs, to avoid facing and living with the reality of political betrayal? Could it be that Museveni’s government feels it lacks the moral stand to do business with Raila Odinga (if indeed he becomes the next president of Kenya) or his kins in Western Kenya who up to today, see Museveni as a treacherous big brother? On the hand, hasn’t there been a string of opinions that Museveni thinks Raila Odinga has been politically sympathetic to Uganda’s opposition, especially Col Kizza Besigye---Museveni’s main political opponent?

Wouldn’t it be more sensible for Museveni’ government to work with the Kenyan government, irrespective of who is president there, to eliminate obstacles on the more economic Mombasa-Kampala route than ramping up for the economically unviable alternative route through Tanzania? Is it too politically hazy for Museveni’s government to clearly see that Uganda needs Kenya more than Kenya needs Uganda in this and, perhaps, other regards? Or, is the incubating Migingo Island saga being discounted?

Let’s face it: the Shs.150 per litre rebate for a new transit route through Tanzania is driven by negative political ego and idiocy. A meaningless rebate for a new route to the coast away from Kenya is a puke at Uganda’s relationship with Kenya; I urge the Ugandan business community to reject it with the contempt it deserves.