Uganda: Service Station Standards & Regulation

In Uganda, there are over 66 licensed oil companies with Shell occupying the biggest share of 34 per cent, Total 21 per cent, Kobil 7 per cent and the rest sharing the remaining 38 per cent.   Mr Onek said all players are licensed following similar procedures and that competition was good to provide alternatives for consumers. “Big fuel companies have a tendency of withholding fuel to create scarcity so as to charge exorbitant prices. But small players don’t have that ability, so they can always help people out,” said Mr Onek.

However, other players like shell are of a different view, they believe customers have a right to choose service providers of their choice at any cost and quality. “Prices differ because we don’t sell the same quality and may be quantity of products. But people who believe in your services however expensive will always come to you,” said Mr Ivan Kyayonka, the country manager of Shell Uganda. He also believes that URA and UNBS were executing their duties as required notwithstanding some loopholes.

According to the Environment Impact Assessment, all proposed projects should construct a masonry bound wall around the tank to guard against fuel spreading in case of spillage, should construct and maintain an oil interceptor on site to guard against water pollution, should have illuminated signposts and warning sign posts and should have fire fighting equipment.  There are tens of fuel stations that do not meet these conditions but authorities are equally divided over their legality.

Kampala City Council’s Public Relations Officer Mr Simon Muhumuza said most single pumps were operating illegally but Ms Naomi Karekho, Nema’s spokesperson said all pumps are authorised and that certain conditions like constructing masonry bound wall around the tank depends on the location of the pump.  “Our work is to approve the architectural work of petrol stations but majority of those with no shelter don’t conform to our planning provisions,” said Mr Muhumuza. He also promised to pursue an investigation into the matter.

Mr Ochieng blamed the ‘unfair’ competition to weaknesses in regulations by the tax collection body- URA and the quality and standards enforcement body - UNBS.  “The independent pumps along roads are not subjected to the required inspection and I don’t think that they meet all the required standards of operation the way we do. URA and UNBS are applying double standards,” said Mr Ochieng.

UNBS spokesperson Mr Moses Ssebunya refuted the allegations saying that all oil pump stations were inspected and verified twice a year to ensure that they meet the required standards. “The issue of prices is not our concern. Big companies have a wider coverage and the only way small ones can compete with them is by charging lower prices,” said Mr Ssebunya.


Mr Imariera Isaac, the country manager of Petro Uganda said that players should not expect their market shares to remain the same with the increasing number of service providers. “Consumption and service growth are not moving at the same rate, we all have to compete for the available market,” he said.  He, however, refuted allegations that unauthorised companies were importing Jet A1 oil saying that no small company could involve itself in such.  “Kerosene contributes a small percentage of the volume of petroleum products we sell,” said Mr Imariera. 

However, oil players unanimously called on the government to encourage traders to use the Tanzanian route by offering incentives saying that the Kenyan route was so overwhelmed to meet Uganda’s needs.  Importation of a cubic meter of oil from Dar-es-Salaam costs $200 (about Shs400, 000) yet importing a similar quantity from Kenya costs $50 (about Shs100, 000).  However to avert a possible repeat of the situation created early last year after the violent scenes in Kenya following elections, it is inevitable that Tanzania offers an alternative route.

PetrolWorld 201009