Oil marketing companies under the Sustainable Energies and Petroleum Association (SEPA Uganda) have officially denied government allegations of price hiking and hoarding.
The relationship between the Ugandan government and private oil marketing companies (OMCs) has reached a critical boiling point. In late April 2026, a sharp rise in pump prices and reports of dry fuel stations in regional hubs like Mbarara, Arua, and Tororo have ignited a fierce “blame game.” While the Ministry of Energy and Mineral Development, alongside the Uganda National Oil Company (UNOC), maintains that the country has sufficient reserves, the Sustainable Energies and Petroleum Association (SEPA Uganda) has come out strongly to defend its members against allegations of price hiking and hoarding.
This standoff is not merely a local dispute; it is a complex collision of national regulatory shifts, logistical bottlenecks, and the tremors of a volatile global oil market.
The Government’s Allegation: Hoarding and Market Distortion
The friction began in mid-April when motorists in Mbarara and border districts reported petrol prices soaring toward 6,000 UGX per litre. At the same time, several stations displayed “Out of Stock” signs, despite official government data suggesting a healthy supply chain.
Addressing Parliament on April 24, 2026, David Bahati, the State Minister for Trade, issued a stern warning. He alleged that some dealers were intentionally withholding stock to create an artificial shortage, thereby driving prices higher to maximize profit.
“We know the list of people who buy from UNOC and at what price,” Bahati stated. “We are going to follow up to ensure there is no price distortion. We have enough fuel stock, and we will use our control over imports to stop this speculation.”
The government’s confidence stems from the Petroleum Supply (Amendment) Act of 2023, which granted UNOC the sole mandate to import petroleum products into Uganda. By centralizing imports, the state argues it has a clear view of exactly how much fuel enters the country, making retail-level shortages “unjustifiable.”
SEPA Uganda’s Defense: “Unfounded Allegations”
In a swift and firm rebuttal, SEPA Uganda—the umbrella body for licensed downstream oil marketing companies—released a statement on April 26, 2026, dismissing the government’s claims as “unfounded.”
SEPA argues that the downstream sector operates within a robust compliance framework and that individual companies are being unfairly scapegoated for systemic issues. According to the association, the price increases are not the result of “dirty games” but are a direct reflection of:
- Increased Global Costs: Crude oil prices have remained stubbornly above $100 per barrel due to heightened tensions in the Middle East.
- Logistical Constraints: Challenges in the regional transport corridor from the Port of Mombasa and the Port of Dar es Salaam have delayed some shipments.
- Exchange Rate Volatility: The fluctuating strength of the Ugandan Shilling against the US Dollar directly impacts the cost of purchasing fuel from UNOC.
SEPA maintains that “stock-outs” at specific stations are localized operational failures—such as a delay in a specific truck’s arrival—rather than a coordinated effort to hoard fuel.
The Role of UNOC and National Reserves
At the heart of the government’s argument is the data provided by UNOC. As of late April, UNOC reported that Uganda’s petrol stock stands at approximately 70.5 million litres (19 days of cover) and diesel at 43.2 million litres (12 days of cover). With an additional 119 million litres reportedly in transit via Kenya and Tanzania, the state insists there is no physical reason for a shortage.
However, industry experts point out that “days of cover” is a theoretical metric. If the fuel is in the national tanks or in transit, but not yet at the retail pump in a town like Mbarara, the consumer still feels a shortage. This “last-mile” logistics gap is where the government and private dealers often clash.
Regional Dynamics: The Border Town Pressure
The price spikes have been most aggressive in border towns. In Arua and Tororo, prices have outpaced the national average. UNOC explains this as a result of “naturally higher cross-border demand,” where buyers from neighboring countries seek Ugandan fuel because it remains slightly cheaper than in Kenya or Rwanda.
| Region | Average Petrol Price (UGX/Litre) | Average Diesel Price (UGX/Litre) |
| Kampala | 5,300 – 5,600 | 5,000 – 5,200 |
| Mbarara | 5,700 – 6,000 | 5,400 – 5,600 |
| Border Towns | 5,800+ | 5,500+ |
Impact on the Ugandan Citizen
For the average Ugandan, this standoff is more than just a corporate or political debate; it is a threat to their livelihood. High fuel prices have a “domino effect” on the economy:
- Transport Costs: Public transport fares for taxis and boda bodas have already begun to creep upward in the Western region.
- Food Inflation: As the cost of trucking building materials and agricultural produce increases, consumers are seeing higher prices in local markets.
- Business Uncertainty: For small business owners relying on generators or delivery services, the unpredictability of pump prices makes financial planning nearly impossible.
Looking Ahead
As of Monday, April 27, 2026, the standoff remains unresolved. While the government threatens enforcement action against suspected hoarders, SEPA continues to call for a more nuanced understanding of the global and logistical hurdles facing private dealers.
The “Temple of Stability” for Uganda’s fuel market now rests on two factors: the smooth arrival of the 195 million litres of petrol expected in May and the government’s ability to move beyond threats toward collaborative monitoring with the private sector. Until then, motorists in Mbarara and across the country will continue to eye the pump with a mixture of anxiety and frustration, waiting for the prices to catch up with the government’s assurances of “plenty.”
