The legal and economic regime of oil price fluctuation in Uganda as compared to Nigeria and Norway

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Kampala International University,School of Law
A steep upward and downward trend in the price of crude oil in recent years, reaching a record nominal high in mid-2011, has led to increasing concern about its macroeconomic implications:, both abroad and in Uganda given that the Ugandan economy is highly vulnerable to oil price fluctuations. This study analyses the dynamic legal and economic relationship between oil price fluctuations and major macroeconomic variables in Uganda. The study points out the asymmetric causes such as poor legal regimes and increased taxation of oil products. It also points out the effects of oil price fluctuations; for instance, positive as well as negative oil price fluctuations significantly increase inflation and also directly increases real national income through higher export earnings in case Uganda starts to export its oil which has been discovered in the Albertine region, though part of this gain is seen to be offset by losses from lower demand for exports generally due to the economic recession suffered by trading partners who are not oil exporters. The available literature shows a strong positive relationship between positive oil price changes and real government expenditures. Unexpectedly, the result identifies a marginal impact of oil price fluctuations on industrial output growth. Furthermore, the ~‘Dutch Disease “syndrome is observed through significant real effective exchange rate appreciation. This research considers and extends the existing empirical literature of world oil price fluctuation especially in Uganda, Nigeria and Norway depends on oil imported through Mombasa Port, though efforts to begin domestic production are in high gear Like prices of other commodities in Uganda and world over, the price of crude oil experiences wide price swings in times of shortage or oversupply. The crude oil price cycle may extend over several years responding to changes in demand as well as PEC and non OPEC supply. The researcher in this study discussed the responsible factors of oil price fluctuations, impact geopolitical/ events, the comparison between Uganda, Nigeria and Norway, as well as the recommendations for a stable oil price if any.
A thesis presented to the college of higher degrees and research Kampala International University Kampala, Uganda in partial fulfillment of the requirements for the award of Masters Degree in Commercial Law
Economic regime, Oil price, fluctuation in Uganda