Summary:

• Longstanding fuel suppliers in Uganda, TotalEnergies and Shell, are facing delayed payments from government departments, leading to potential supply cuts. Some departments have already been affected, prompting exploration of alternatives like Stabex International. The Ministry of Finance emphasizes timely payment to avoid accumulating arrears.

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For an extensive duration, numerous government ministries, departments, and agencies (MDAs) in Uganda have maintained agreements with longstanding major fuel suppliers—TotalEnergies Marketing Limited (formerly Total Uganda) and Shell.

Under this arrangement, these fuel dealers have consistently provided fuel to numerous government entities, sometimes extending credit terms. The billing cycle varies, spanning from monthly to quarterly or annually.

Beyond fuel provisions, some MDAs also avail themselves of additional services such as periodic vehicle maintenance, gas, lubricants, and related offerings.

However, certain government departments face the risk of exclusion from this arrangement as fuel industry giants move to mitigate financial risks.

Recent insights reveal that TotalEnergies is owed Shs12bn and Shell Shs6bn by government departments for fuel supplies. Consequently, these suppliers are hesitating to continue fuel provisions to certain departments due to outstanding dues, despite multiple reminders issued to the concerned entities.

The recurring explanation provided for delays in payment has been financial constraints within the government, often expressed as ‘insufficient funds, await payment.’

According to undisclosed sources, some government departments have already faced cutoffs from fuel supplies, while negotiations are ongoing with others.

Notably, among the government departments reportedly lagging in clearing their dues on time are the Ministry of Water and Environment, Ministry of Trade, UETCL, UEGCL, and KCCA, among others.

It has come to our attention that some affected government entities, rather than settling their debts, are exploring alternative arrangements with Stabex International Limited Uganda, purportedly offering more flexible terms.

Stabex is emerging as a significant player in the energy sector, rapidly expanding its presence across the nation by inaugurating new fuel stations at a remarkable pace, causing unease among established players like Shell and Total.

The Ministry of Finance has consistently emphasized the importance of promptly settling domestic arrears to avoid their accumulation, emphasizing the personal accountability of accounting officers who fail to do so.

These arrears typically result from the provision of goods and services to the government, accumulating when budgeted funds earmarked for their clearance remain unutilized beyond their allocated period.