At a time when fuel prices across the world are swinging unpredictably—driven by geopolitical tensions, supply chain disruptions, and shifting demand—Uganda’s pump prices have remained relatively steady. For motorists and businesses alike, this stability has raised questions: How is Uganda National Oil Company managing to keep fuel prices comparatively low?
And who ultimately controls what consumers pay at the pump? According to the Uganda National Oil Company (UNOC), the answer lies in a deliberate strategy focused on supply security, price moderation, and insulation from international market shocks.
Tony Otoa, UNOC’s Chief Corporate Affairs Officer, in a recent interview with Uganda Radio Network, said that they assumed full responsibility for the importation of petroleum products, and they have ensured that there is a steady supply of the petroluem products.
The Petroleum Supply (Amendment) Act, 2023, granted UNOC an exclusive role in importing petroleum products, which would subsequently be distributed to oil marketing companies (OMCs).
Otoa explained that UNOC’s primary objective is ensuring uninterrupted fuel availability nationwide.
In industry terms, he describes this as keeping the country “wet”—a concept that prioritizes constant supply over short-term profit.
“If you look at the international global market, you will realize that Uganda is doing a very good job. Our prices are very stable, and we are making sure that the country has fuel at all times,” he explained.
This approach, he says, is critical for an economy heavily dependent on road transport, where fuel disruptions can quickly translate into higher food prices, increased transport costs, and inflationary pressure across multiple sectors.
One of the most striking aspects of Uganda’s fuel market, UNOC argues, is that pump prices remain competitive despite the country’s geographic disadvantage.
Uganda imports all its refined fuel through the port of Mombasa, meaning products must be transported hundreds of kilometers inland before reaching Kampala and other towns.
“If you compare our fuel prices with those of our neighbors, you will find that we are lower than theirs. And yet we have to travel all the way from Mombasa,” he said.
Fuel delivered through this corridor supplies not only Kampala, but also distant regions across the country, from eastern and northern Uganda to the western border districts.
According to UNOC, maintaining affordability across these regions underscores the effectiveness of its supply coordination and pricing discipline.
Many Ugandans expected that the fuel prices would be much lower after the middlemen were removed. Otoa explained that the fuel prices are largely determined by the global oil markets, which are rarely stable. Prices fluctuate based on crude oil production levels, conflicts in oil-producing regions, shipping costs, and currency movements. He says UNOC often intervenes to cushion consumers from sudden spikes.
“In all honesty, our prices are very fair. They have stayed constant. Even when there are changes in the global market, we step in as a company to sustain that change until things stabilize,” he said.
This strategy, UNOC argues, prevents panic pricing, hoarding, and speculative behavior that can worsen market instability.
By maintaining a steady supply and pricing, the company says it helps keep inflation in check and supports economic planning for businesses that rely on predictable fuel costs. Some Ugandans have noticed some stability in terms of prices.
At least, going by the testimony of Samson Tinka, a farmer based in Nakasongola.
“Every morning, as I dropped my children to school, I flashed my eyes on the price boards of petrol stations to see if the prices were as I had left them 8 hours ago,” he said.
“It was common years earlier to find price differences overnight. And in most cases, prices would fluctuate upwards.”
He explained that after UNOC assumed the responsibility of direct importation and the supply of oil products in Uganda, it has not only been superb, but most importantly, Ugandans have seen a semblance of price stability.
Why Pump Prices Differ Across Stations
Despite UNOC’s insistence on uniform pricing at the wholesale level, motorists frequently encounter varying prices at different fuel stations—sometimes within the same town. The disparity has fueled public confusion and speculation about price manipulation. UNOC says the explanation lies in Uganda’s liberalized fuel market.
“We live in a free market economy. As UNOC, we supply all oil marketing companies fuel at the same price. Whether it is Oilcom, Stabex, Shell, or any other station, the price is uniform,” he said.
Once fuel is delivered, however, retail pricing becomes the responsibility of individual oil marketing companies. Operational costs, rent, branding, transport logistics, and business strategies all influence the final price at the pump.
“You may find diesel at Shs4,300 or Shs4,400 at some stations, and Shs4,700 or Shs4,800 at others. That distortion is controlled by the stations themselves, not UNOC,” the official added.
An analogy was drawn to pricing differences in everyday consumer goods, where the same product can cost more in an upscale location than in a neighborhood shop, reflecting overhead costs rather than wholesale pricing differences.
Balancing Market Freedom and Consumer Protection UNOC maintains that its mandate is not to regulate retail prices but to ensure fair access to fuel for all oil marketing companies, regardless of size.
By selling fuel at a uniform price, the company says it creates a level playing field and promotes competition among retailers. This competition, in theory, allows consumers to choose cheaper stations while encouraging efficiency in the market.
However, analysts note that price variations also highlight the need for consumers to remain informed and compare prices, particularly during periods of heightened demand such as festive seasons.
Looking Ahead
As Uganda prepares for future developments in its petroleum sector—including the commercialization of domestic oil resources—UNOC says supply stability and pricing discipline will remain central to its mission.
For now, the company insists that despite global uncertainty, Uganda’s fuel market is functioning effectively. “We have maintained our fuel prices. We have maintained our supply. And this ensures the country does not experience disruptions in pricing,” the official said. For motorists navigating fluctuating global oil headlines, that assurance may be as valuable as the fuel itself.
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