Overview:
The concerns emerged Tuesday during the dissemination of the Uganda Business Climate Index for the January–March 2026 quarter by the Economic Policy Research Centre at Kalya Courts Hotel.
Uganda’s economy is facing growing pressure from the ongoing Middle East conflict, with business leaders warning that the continued rise in fuel prices could cripple local enterprises and worsen the cost of living across the country.
The concerns emerged Tuesday during the dissemination of the Uganda Business Climate Index for the January–March 2026 quarter by the Economic Policy Research Centre at Kalya Courts Hotel.
According to the report, the conflict has already disrupted Uganda’s business environment through soaring fuel prices, increased shipping and freight costs, and limited access to imported raw materials — factors that are steadily pushing up the cost of doing business.
The crisis intensified in late February 2026 after joint U.S. and Israeli strikes on Iran disrupted global oil supply routes, especially through the Strait of Hormuz, one of the world’s key crude oil transit channels. The disruption has since triggered sharp increases in fuel prices in Uganda.
Petrol prices, which previously averaged about 4,900 shillings per litre, now range between 5,500 and 8,000 shillings in different parts of the country, raising fears that businesses could struggle to survive if the trend continues.
Businessman Ferdinand Atwongyere said the rising fuel prices are already cascading through the economy, driving up transport costs and increasing prices of essential commodities.
“We are suffocating because of the fuel prices. Fuel is the heart of business in Uganda. Once fuel prices increase, transport costs also rise, and eventually every commodity becomes expensive,” Atwongyere said.
He questioned why fuel prices had increased by nearly 1,500 shillings within a short period despite government assurances that the country has adequate fuel reserves.
Another trader, Brian Aruho, said businesses are also grappling with inconsistent pricing at fuel stations across the country, with some operators charging excessively high rates.
Aruho said many enterprises have already registered losses because of higher fuel costs, while others have been forced to increase the prices of goods and services to remain operational.
“We understand that fuel prices have increased globally, but the challenge is that every fuel station now has its own price, and some have hiked prices excessively. Government should regulate the prices,” Aruho said.
Participants at the meeting warned that if the fuel crisis persists, it could further weaken business confidence, reduce competitiveness, and strain household incomes.
They urged government to expand strategic fuel reserves to shield the country from global supply shocks and to continue investing in electricity distribution infrastructure to reduce outages affecting industries and small businesses.
The survey also highlighted stiff competition, declining consumer demand, high taxes, and unreliable electricity supply as key challenges affecting businesses in Uganda.
Dr. Brian Sserunjogi said the survey aimed to assess business performance, identify challenges affecting enterprises, and recommend policy interventions.
He noted that the Middle East conflict has had a significant impact on business confidence because many sectors of Uganda’s economy depend heavily on fuel.
Despite the mounting concerns, the report showed a slight improvement in Uganda’s business conditions, with the Business Climate Index rising from 100.1 points in October–December 2025 to 104.8 points in the first quarter of 2026.