Tanzania’s petrol station sector is a vibrant and essential part of the nation’s energy and transport ecosystem representing the final retail link in the petroleum value chain that fuels vehicles, industry, and logistics operations. Petrol stations, also called fuel retail outlets, provide motorists with petrol, diesel, kerosene, and increasingly alternative fuels like CNG and LPG.
As of September 2024, the Energy and Water Utilities Regulatory Authority (EWURA) reports there were 2,597 licensed petrol stations in Mainland Tanzania with growth extending into rural and underserved regions.
The sector’s growth mirrors Tanzania’s broader economic trajectory, with expanding road infrastructure, rising vehicle ownership, and growing commercial transport needs all driving increased fuel demand. Recent statistics show fuel imports rose 10.9 percent in the 2023/24 financial year, underlining expanding consumption across economic segments.
Fuel retailing in Tanzania remains volume driven with relatively narrow per-litre margins but high aggregate revenues. Operators who improve location selection, supply logistics, operating efficiency, and ancillary revenue streams can capture additional value and stabilize earnings.
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Industry Segmentation.
Understanding the market’s structure is vital for investors evaluating entry points or expansion strategies. The petrol station industry in Tanzania can be categorized along multiple dimensions.
- By Ownership:
Ownership in the Tanzanian petrol station sector is diverse. International Oil Marketing Companies (OMCs) such as Puma Energy and TotalEnergies operate large, branded networks, bringing global standards, supply stability, and marketing strength.
Local independent retailers dominate the market, accounting for approximately 60 percent of all petrol stations. These are privately owned and operated outlets that often serve local communities in pre-urban and urban region.
Franchise partnerships involve local investors collaborating with multinational OMCs, combining local market knowledge with international operational expertise. This model allows smaller investors to leverage brand recognition and supply chain reliability while expanding coverage across strategic locations.
- By Geography.
Geography plays a critical role in shaping market demand. Urban centers such as Dar es Salaam, Mwanza, Arusha, and Dodoma host high traffic volumes and dense customer bases, making them attractive but competitive markets.
Rural and remote areas represent the fastest-growing segment, with under-served demand creating opportunities for new station development. Policy incentives, including licensing support and targeted infrastructure programs, encourage investment in these regions, enabling operators to establish first-mover advantages.
- By Services.
Stations also differ based on the range of services they provide. Basic fuel retailing remains the foundation, offering petrol, diesel, and kerosene to individual and commercial consumers.
Service diversification is increasingly common, with mini-markets, cafés, car washes, vehicle maintenance services, and ATMs enhancing customer experience and revenue per customer. Additionally, alternative fuel provision such as CNG and LPG is gaining traction, reflecting global energy trends and government support for cleaner, cost-effective fuels.
Segmenting the market by ownership, geography, and services enables stakeholders to identify growth opportunities, optimize operations, and design offerings that meet diverse consumer needs.
Global and Regional Perspective.
Globally, the fuel retail market is undergoing transformation. Emerging energy trends include diversification into alternative fuels and digital infrastructure for operations and customer engagement.
Tanzania’s retail network echoes these trends, although at an earlier adoption stage compared to developed markets. Emerging technologies, for example the Internet of Things for fuel management and advanced point-of-sale systems, are increasingly relevant for operational efficiency and customer experience and provide a frontier that Tanzanian operators can leverage as competition intensifies.
Within East Africa, Tanzania is a strategic player thanks to its transport corridors connecting to landlocked neighbors such as Burundi, Rwanda, and parts of the Democratic Republic of Congo.
These regional trade routes generate consistent fuel demand, especially for diesel, and present opportunities for investors to capture cross-border retail and logistics refueling needs.
Tanzania’s expanding fuel network is part of a broader regional push to enhance energy access, boost economic integration, and support transport corridors. This regional context enhances the attractiveness of fuel retail investments, particularly along busy highway nodes and border towns.
Major Trends.
Fuel demand in Tanzania continues to rise, driven by economic growth, population increase, and transport sector expansion. As of mid-2024, Tanzania’s licensed petrol stations numbered over 2,597, showing consistent year-on-year growth. Rural coverage is also improving, with 480 rural stations reported, nearly a 33 percent increase over previous years, signaling demand beyond urban centers.
A major trend reshaping the market is the adoption of compressed natural gas. The number of operational CNG stations has risen from just two in 2020/21 to nine by April 2025, with ambitious government targets pushing for hundreds more.
CNG adoption supports cleaner, more affordable energy options, costing roughly 40 to 50 percent less than petrol per equivalent energy unit, and aligns with Tanzania’s environmental commitments.
Despite growing interest, CNG infrastructure is still limited, creating investment opportunities for early developers willing to build stations and conversion support services.
Challenges include higher setup costs and limited private sector engagement, but government regulatory support and expected demand growth make this a compelling segment for long-term investors.
Market Size.
A key metric in analyzing the Tanzanian petrol station industry is the number of operating outlets and fuel consumption trends. Between 2018 and 2022, the number of petrol stations grew from approximately 1,997 to over 2,361 by mid-2023, reflecting consistent expansion alongside national economic activity.
Licensed petrol stations surpassed 2,597 outlets in 2024, showcasing ongoing investment and demand growth across urban and rural areas. Fuel import and consumption data also illustrate rising demand.
EWURA reported a 10.9 percent increase in fuel imports in 2023/24, indicating robust usage across sectors.
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Daily fuel consumption has grown substantially over recent years, with petrol and diesel volumes rising due to expanding commercial and transport activities. This expansion reflects broader economic diversification and activity in sectors requiring reliable energy inputs such as construction and logistics.
Future Outlook.
Looking forward, Tanzania’s petrol station market is poised for continued growth. Expansion into rural and peri-urban markets will increase access to fuel for previously underserved communities. Alternative fuels adoption, particularly compressed natural gas and liquefied petroleum gas, will continue to be supported by government strategy and environmental imperatives.
Digital transformation in stations will improve operational efficiency and customer experience, while integrated services such as mini super market shops and electric vehicle charging infrastructure will reflect global retail trends. Investors who position themselves early in segments like CNG infrastructure and multi-service stations will likely capture disproportionate value as demand patterns evolve.
Strategic Opportunities.
The petrol station business in Tanzania presents a highly attractive investment landscape with multiple avenues for growth and profitability. Rising vehicle ownership, expanding road infrastructure, and increased commercial and industrial activity are creating sustained demand for fuels including petrol, diesel, LPG, and compressed natural gas.
These trends indicate that the market is not only stable but also poised for significant expansion over the next five years. Investors who strategically position themselves in the right locations and offer diversified services can capture both immediate returns and long-term growth.
One of the most promising strategies is to establish new petrol stations along major transport corridors and high-traffic urban and peri-urban areas.
These locations benefit from a steady flow of private vehicles, commercial fleets, and logistics operations, ensuring consistent fuel sales.
Stations that cater to larger vehicles and provide efficient refueling infrastructure are more likely to attract fleet operators, which typically generate higher and more predictable revenues.
Expanding into rural and semi-urban regions also presents untapped opportunities, as these areas often have limited access to modern fueling facilities, allowing new entrants to secure early market dominance.
The adoption of alternative fuels provides another strategic avenue. Compressed natural gas is gaining attention as a cleaner and cost-effective option for transport, while LPG is increasingly used in domestic and industrial applications. Investors who introduce stations offering multiple fuel types can benefit from a broader customer base and diversify revenue streams.
Early movers in alternative fuel infrastructure can secure a competitive advantage, especially as government policies and environmental initiatives continue to promote cleaner energy solutions. Integrating these fuels alongside traditional petrol and diesel enhances the station’s market relevance and positions it for future growth in line with global energy trends.
Beyond fuel sales, value-added services are essential for maximizing profitability. Petrol stations that include shops, quick-service restaurants, garage and maintenance services, and other customer-focused amenities can increase dwell time and overall spending per visitor. These services also help build loyalty, encouraging repeat visits and creating a more stable revenue base.
Incorporating digital solutions, such as mobile payments, debt collection, and fuel management systems, further enhances operational efficiency and customer engagement, while reducing the risk of human error and loss.
Strategic partnerships also play a critical role in ensuring long-term success. Collaborating with oil marketing companies, industrial clients, and transport fleets can provide consistent fuel supply agreements and predictable sales volumes.
Investors who understand regulatory frameworks, adhere to safety and environmental standards, and leverage government incentives will not only reduce operational risks but also enhance credibility and trust among customers and business partners.
Additionally, designing stations with scalable infrastructure allows operators to accommodate future trends, including electric vehicle charging points, positioning them ahead of competitors as the energy landscape evolves.
Conclusion.
Historically, the Tanzanian petrol station business was driven by informal market understanding, location intuition, and supply relationships with oil marketing companies (OMCs).
Many station owners select location based on visible traffic flow, anecdotal demand, or proximity to roads and towns, rather than structured demand analysis or financial modeling.
In an environment with limited competition and relatively stable margins, this approach was often sufficient.
However, the sector has undergone a fundamental transformation over the past decade. Increased market liberalization, regulatory oversight by EWURA, price controls, rising land and construction costs, and intense competition have significantly increased the cost of poor investment decisions .
As a result, petrol station development has shifted from a simple trading activity into a capital-intensive, compliance-driven, and data-sensitive investment.
Today, petrol stations are no longer guaranteed cash-flow businesses. Profitability depends on location economics, traffic density, supply logistics, operating efficiency, and ancillary revenue streams.
Consequently, evidence-based decision-making, supported by market research, feasibility studies, and demand forecasting—has become a strategic necessity rather than a luxury
In conclusion, the Tanzanian petrol station industry offers a multidimensional investment opportunity that extends beyond fuel sales. By combining prime location selection, diversified fuel offerings, value-added services, technology adoption, and strategic partnerships, investors can build profitable, resilient, and future-ready businesses.
The sector’s growth trajectory, supported by favorable market trends and government initiatives, ensures that early and well-planned investments can yield substantial long-term returns, establishing a sustainable foothold in one of East Africa’s most critical infrastructure markets.
