Fuel adulteration cases rose markedly in the year ending June 2025, sparking fresh concern over the effectiveness of fuel quality safeguards under the Fuel Marking and Quality Monitoring Programme.
Findings contained in the 2025 Auditor General’s annual report show that the number of fuel stations cited for non-compliance due to adulteration climbed sharply from 230 in the previous financial year to 459, almost doubling within 12 months.
The Auditor General attributes the surge largely to economic distortions within the petroleum tax regime, particularly the relatively low tax imposed on kerosene. This, the report notes, has created strong incentives for unscrupulous operators to blend kerosene with other fuel products, since the financial gains outweigh the penalties imposed when violations are detected.
As a result, deterrence has been weakened, encouraging wider non-compliance across segments of the fuel supply chain.
The report further highlights monitoring gaps that undermined enforcement efforts. Although the programme is expected to inspect all fuel stations nationwide every month, this target was not met during the review period. Average annual inspection coverage stood at 81 percent, with monthly performance fluctuating between 67 percent and 89 percent, and no single month achieving full coverage.
These shortfalls, the Auditor General observes, limited the programme’s capacity to promptly identify adulterated fuel and enforce compliance consistently.
Despite these challenges, the programme recorded strong financial performance, achieving 99 percent of its projected revenue and utilising 98.6 percent of the funds released. However, enforcement effectiveness was indirectly affected by declining laboratory testing income, following the establishment of in-house fuel testing facilities by major oil marketing companies such as TotalEnergies and Vivo Energy.
The report also points to operational constraints, noting that 22 planned activities valued at Shs242.98 million were not implemented, reducing the programme’s ability to respond effectively to the growing threat of fuel adulteration.
Industry sources indicate that concerns over inconsistencies in test results from the national laboratory have pushed leading oil marketers to set up private laboratories to independently verify fuel quality. In the previous reporting period ending June 2024, only one major company had done so, but this has since increased, with both Vivo Energy and TotalEnergies now operating their own facilities.
Over the past three years, the Fuel Marking and Quality Monitoring Programme had strengthened oversight of petroleum products, helping to reduce fuel adulteration and curb tax evasion. However, the recent reversal of these gains presents renewed risks for motorists and the wider downstream petroleum sector.
While routine inspections have previously improved compliance and bolstered consumer confidence, the Auditor General warns that sustained enforcement, improved monitoring coverage and stronger deterrents will be critical to restoring the programme’s effectiveness.
