Rising fuel prices have pushed annual inflation higher, increasing business costs, squeezing household budgets, and slowing economic activity.
Details released by Uganda Bureau of Statistics (Ubos) show annual inflation rose to 3.2 percent in the 12 months to May 2026, up from 3.0 percent in April.
The increase was largely driven by higher fuel prices, which continue to ripple through transport, manufacturing, and other sectors of the economy.
Inflation updates come amid a sharp increase in pump prices, which in February, a litre of petrol retailed at Shs5,080, but has since risen by Shs1,539, equivalent to a cumulative increase of more than 30 percent.
At the weekend, major fuel retailers, including Shell and TotalEnergies, were selling petrol at around Shs6,619 per litre, while diesel retailed at about Shs6,490.
Ubos data shows annual liquid energy fuels inflation surged to 16.6 percent in May, up from 7.7 percent in April.
As a result, annual Energy, Fuel and Utilities (EFU) inflation increased to 9.1 percent from 6.1 percent the previous month.
Petrol prices rose by 16.6 percent on an annual basis, compared to 8.7 percent in April, while diesel inflation rose to 21.5 percent from 10.8 percent, and kerosene inflation jumped to 25.4 percent from 7.5 percent. Cooking gas prices also recorded a modest increase.
Month-on-month, EFU inflation rose to 3 percent in May from 1.8 percent in April, largely due to a 9.3 percent increase in liquid fuel inflation.
Ubos head of macroeconomic statistics, Samuel Echoku, said at the weekend that the increase is largely linked to the ongoing conflict in the Middle East, which has disrupted global oil supply chains.
‘The increase in oil prices in Uganda is a result of the war in the Middle East, which has disrupted the supply chain of oil,’ he said.
Last week Ministry of Energy assistant commissioner for communication and information management, Patricia Litho, said tensions around the Strait of Hormuz, a critical global oil transit route, have increased international prices for crude oil and refined petroleum products.
As a net fuel importer, Uganda has had to absorb these external shocks through higher import costs.
Additional pressures, including rising freight charges, marine insurance premiums, regional demand, and exchange-rate movements, have further increased costs.
Litho noted that Uganda initially benefited from fuel stocks procured before the escalation of tensions, allowing domestic prices to remain relatively stable.
However, newer shipments purchased after the conflict intensified have arrived at significantly higher costs, which are now filtering through to consumers.
The impact is increasingly visible across the wider economy, with annual services inflation rising to 4.6 percent in May from 4.1 percent in April, driven largely by higher passenger transport charges, which increased by 10.6 percent compared to 2.2 percent previously.
Energy is a critical input across transport, agriculture, manufacturing, and services. Consequently, higher fuel prices raise operating costs, increase the price of moving goods, and reduce household purchasing power.
Some food prices, however, provided a measure of relief. Annual core goods inflation eased to 1.7 percent in May from 2 percent in April, reflecting slower price increases for maize flour, rice, sugar, fish, and other food products.
Annual food crops and related items inflation also slowed to 0.2 percent from 0.6 percent, largely due to falling prices for matooke, sweet potatoes, and beans.
Nevertheless, analysts warn that gains from lower food inflation could be offset if fuel prices continue rising.
But government says it has taken steps to cushion consumers, with the Ministry of Finance noting that centralised fuel procurement through UNOC has helped streamline imports and improve supply management.
Strategic fuel reserves in Jinja have also been deployed to stabilise supply and reduce shortages.
Absa acting head of trading Richard Nsubuga said international oil prices have slightly eased, with Brent crude futures recently falling below $92 per barrel amid optimism over easing tensions between the United States and Iran.
He noted that global oil prices have declined by nearly 15 percent last month on hopes of a diplomatic breakthrough, although uncertainty remains over Iran’s nuclear programme, sanctions relief, and the future security of the Strait of Hormuz.