The Ministry of Finance Permanent Secretary and Secretary to the Treasury (PSST), Ramathan Ggoobi, has said that reducing taxes on fuel would not necessarily lower pump prices, arguing that the current increase is being driven primarily by rising global crude oil prices.
Ggoobi said cutting fuel taxes would deprive the government of revenue needed to sustain public services and support the economy without guaranteeing that consumers would pay less at the pump.
“Removing taxes will not reduce prices because taxes are not what has caused the price increases. It is the price of crude oil,” Ggoobi said during an appearance on KFM.
He illustrated how developments on the international stage could quickly offset any savings resulting from a tax reduction.
“You may remove today Shs200 on a litre, and tomorrow Trump just tweets that they’re going to attack the Iranians again, and the price of crude increases by the equivalent of Shs400,” he said.
According to Ggoobi, such a scenario would leave the government with reduced revenue while motorists continued to face high fuel prices.
“You have lost revenue as a government, which we badly need now to ensure that we can do certain things to keep the economy afloat, and yet, at the same time, the price of fuel has not reduced,” he said.
Ggoobi said the government was responding to the prevailing economic pressures by cutting expenditure, tightening monetary policy and protecting sectors considered critical to economic growth.
He revealed that only half of the fuel budget for the second quarter of the 2026/27 financial year had been released, while allocations for consumptive expenditure had been reduced.
At the same time, he said, the government had protected growth-driving sectors, including agriculture and tourism, to sustain economic activity.
“The message of government is that, as we try to respond — because we are responding as government by cutting expenditure, tightening monetary policy and, at the same time, investing in growth sectors — the public also needs to respond,” Ggoobi said.
He urged Ugandans to adjust their lifestyles in response to changing economic conditions, including reducing their dependence on imported goods and embracing locally produced alternatives.
“You have to lose some level of happiness or enjoyment to survive,” he said.
Ggoobi questioned why consumers should continue purchasing imported food products such as spaghetti when locally available alternatives, including potatoes, cassava and matoke, could offer more affordable options.
“Why are you eating spaghetti at a time when inflation is rising and the exchange rate is high?” he asked.
He also urged motorists to reduce unnecessary fuel consumption, advising those accustomed to driving people home as a routine favour to reconsider the practice amid rising fuel costs.
“If you have a car and you are used to buying fuel full tank and dropping random people home, this is the time you drop yourself home,” he said.
His remarks come amid concerns over rising fuel prices and their potential impact on household budgets, transport costs and the wider economy.
