Big Interview: Fuel crisis can be addressed through better coordination of EAC members

Over the past couple of weeks, the fuel pump prices have continued to increase and some fuel stations have also reportedly run out of fuel as a result of the shortage caused by the strike of truck drivers at the Busia, Malaba border points.

Speaking to the Nile Post, the country manager Rubis Energy Uganda, Olivier Gatera, said this crisis can only be addressed if East African countries work together.

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What is Rubis Energy Uganda?

Rubis is a French group of companies listed on the Paris stock exchange. Rubis group was founded in 1990 in France and the group is specialised in distribution, supporting services and storage. The group operates in more than 40 countries which are located in different continents .Recently the French group Rubis acquired various companies in East Africa.

What is Rubis' current coverage in Uganda?

Currently Rubis Uganda covers major towns of the country from the north, west, east and south west .Currently we have more than 50 stations which are located in those major towns across the country. We are still in the process of rebranding the acquired stations into Rubis. In the next one year all the stations will be rebranded.

Since Rubis entered the Ugandan market, Ugandans benefited from the company in terms of employment. Currently we have more than 500 staff located at our head office and at various stations.

How has Covid-19 disrupted your performance especially during lockdowns?

Covid-19 pandemic definitely affected our business as any other sector. The reduction of movements definitely had a direct impact on our business.

The purchasing power of our customers has reduced. We saw our sales volume that we used to do before the pandemic reduced.

But during the lockdowns, we continued to serve our customers. Fortunately we were part of essential workers. So we have never stopped working. On top of that, we reached out to our customers to their homes through home deliveries.

In your view, what could be the major cause of skyrocketing prices of fuel in the country?

There are two major causes of the current station we are in. First of all it’s the delay in the discharge of ships. The ships took longer to discharge the products which were supposed to come to this region from Mombasa. The access of our products was delayed.

The second cause is the strike by truck drivers at the border contesting the charges for Covid-19 test. That strike didn’t ease things. So all the trucks which had loaded on the delayed ships arrived at the border and then the strike came in. All those two factors delayed in the process.

What is the impact of this oil crisis to our economy?

We know very well when the fuel prices are high, definitely the living cost comes high because it has a direct impact on the transport of goods .The cost of transport becomes high, the cost of production by factories becomes high because most of the factories use oil products .At large the living cost becomes high.

What are the possible lasting solutions and how best can the government address these issues regarding fuel?

I think measures are already in place since the drivers’ strike at the borders. The Ministry of Health has waived the charge for the Covid-19 test which has facilitated the movement at the border.

So currently movement is smoother than it was in the last few days but we cannot ignore that at the two borders, there are various parties involved. Coordination of those parties involved is also a challenge and it takes time.

When I talk about parties involved at the borders, I mean on both sides we have revenue authorities {that is to say}Kenya and Uganda revenue authorities. We have immigration offices on both sides, we have the Ministry for health on both sides and we also have other various bodies which operate at the border.

The movement of trucks at the border depends on the coordination of all those parties which operate at the borders.

How does Rubis beat the market with rising prices of petroleum?

In such a situation we always try to be reasonable in terms of pricing at our various stations. We put ourselves in the shoes of our customers and definitely our prices are always reasonable and the example is during this current situation. I don’t think there are any of our stations charging over Shs 5000 per litre. It doesn’t mean that the cost of the product is not high. It is high but during this time, this is the time we are trying to absorb some of the cost to the benefit of our customers because we believe after the crisis there is another life and we need a long term relationship with our customers.

Under what circumstances should fuel dealers hike the price of fuel?

We are against unreasonably hiking prices. I have been seeing on social media where some stations are displaying up to Shs 10,000 per litre, which is really unbelievable. It is not recommended and we are not for it.

We believe customers need a fair price; we are with them during this difficult time because they always support our business but the fuel prices vary depending on the operating costs.

That is why some stations display various prices because companies don’t have the same operating costs.They don’t have the same landing costs but pump prices are guided by the international oil prices.

What are some of the challenges that you have faced so far in the Ugandan market?

The first challenge we face is Covid-19. Our plans, speed of investment reduced because of the lockdowns. Restriction of movement and so on but also the sales we realised were less than our projections. The projection was to double the sales that we had in 2019 and the following year.