Across Tanzania, petrol stations are quietly changing their identity. They are no longer just fuel stops along the road. They are turning into small hubs of daily life — places where drivers refuel, buy essentials goods, or even park fix their cars.
This shift is creating fresh opportunities for investors, but it also comes with serious challenges. At the heart of it all lies one critical decision: where to build.
The right location can generate substantial profits for decades. The wrong one can drain capital and leave the pumps standing empty.
A Growing Market, But With Shifts.
Tanzania’s economy continues to grow at a steady pace, supported by rising transport activity, urbanisation, and population growth. According to the Bank of Tanzania’s April 2025 monetary policy report, inflation is stable and consumer spending is improving, signs that fuel consumption will remain resilient.
The National Bureau of Statistics also projects population increases that will mean more vehicles and higher fuel demand in coming years.
But the market is not static. International oil prices remain volatile, and pump prices in Tanzania have shown sharp swings from month to month, as highlighted in the September 2025 price adjustment by the Energy and Water Utilities Regulatory Authority (EWURA). In addition, new energy options such as compressed natural gas (CNG) are being piloted in Dar es Salaam. Puma Energy recently launched a hybrid station that sells both petrol and CNG, a sign that traditional stations must prepare for changes in the fuel mix.
Read also:CNG a New Opportunities for Petrol Stations in Tanzania
Step One: Study the Traffic and Catchment.
Even the most attractive land deal can be a trap if the traffic does not justify a station. The daily flow of cars, trucks, and even three-wheelers is the single biggest driver of sales.
A site with easy entry and exit, clear visibility, and space for larger vehicles often outperforms smaller plots in crowded areas. What matters is not only the number of vehicles, but also the type. A station on a highway used by heavy trucks can generate higher sales volume than a station on a busy urban corner where most vehicles only buy a few litres.
The presence of competitors is also critical. A radius study can show whether the market already has too many outlets. Field traffic counts over 7 to 14 days are often more reliable than relying on assumptions.
Step Two: Design for More Than Fuel.
Margins on fuel are thin and easily eroded by price swings. That is why the most profitable stations add shops, car washes, service bays, or even mini restaurants. These services raise the average spend per customer and create loyalty. The trend in Tanzania now is towards multipurpose stations that are destinations in themselves.
CNG and Evs are also worth considering. While still at an early stage, these fuels are being promoted as cleaner alternatives. Designing a forecourt with space to add new fuelling options later can protect an investor from being left behind.
Step three: Secure the Right Approvals.
No project can start without the blessing of the regulator. EWURA oversees downstream petroleum sector which includes petrol stations operations. Investors must understand regulatory process and comply with all regulatory requirements for the successful petrol station operation.
Step Four: Test the Business Model.
Investing in a petrol station is expensive, and mistakes are costly. Small, simple experiments can reduce risk. For example, investors can run short traffic counts to confirm vehicle numbers, track competitor prices for 30 days to see local trends, or set up a temporary kiosk to test retail demand before building a permanent shop. Running a financial stress test—by modelling scenarios of 20 to 30 percent lower fuel sales or higher costs—can also show whether the business can survive shocks.
Implications for the Future.
The big picture is clear. Tanzania’s fuel retail market is expanding, supported by growth in transport and urban centres. But success is not automatic. The stations that will dominate in the next decade will be those built on solid data, strong regulatory compliance, and flexible design. Cheap land without traffic is a trap. Ignoring future fuels like CNG is risky. And cutting corners on safety or approvals can end a project before it starts.
The lesson is simple: location is science, not guesswork. A well-chosen site, supported by regulatory clarity and modern services, can turn into a stable and profitable business. A poorly chosen one will struggle, no matter how much money is spent.
