A friend recently reported that he had bought a litre of petrol for his car at Shs 6,000. And he declared that he was planning to sue the fuel station for over-charging him.

The shortage and subsequent hiking of fuel prices came days after the Kenyan election debacle that left Ugandans without enough fuel supplies. Fuel dealers took advantage of the scarcity to hike their prices.

Their actions were fully in line with government's 1993 decision to liberalise all sectors, including fuel dealership. The government argued at the time that it was useless to set fuel prices and instead opted for dealers finding their own level, guided by forces of demand and supply.

If you have ever been a shop-keeper in this country, you'll have seen people who walk into your premises merely to check on your prices. They may decide to haggle with you over the price and then buy, or still walk away. It is called the power of the consumer to buy or demand.

Several businesses look out for the situation in the market before they set their prices. This they say helps them to establish a customer base that they can hang onto. As expected, all business are in the market to attract and retain their customer base. If they fail in this endeavour, they are out of business.

In a perfect situation, a fuel station would sell at a fair price in a bid to keep its customers. However, fuel companies in Uganda operate in an oligopoly where although they compete against each other they also rely on one another. The overheads are also not that great, hence not many firms can join the industry.

But following the Kenyan situation, the dealers acted in concert to raise the price from Shs 2,400 for petrol to Shs 11,000 in some places. And as if their lives depended on it, most Ugandans, including my friend, went ahead to buy.

Now, whereas Ugandans are used to purchasing the same litre of petrol at Shs 2,400, there are others who have been buying it regularly at less than that price, far away from formal fuel stations.

My friend is looking to arrest and prosecute those overcharging fuel consumers. But under what law are they being arrested, I ask? What about those who are selling their petrol at about Shs 2,000? Are they also acting illegally?

I can understand the situation in Masaka, where Police arrested three fuel dealers for allegedly overcharging their customers by selling a litre of petrol at Shs 4,500, after hanging a board that declared the correct price as Shs 2,500 per litre. The dealers were operating in opposition to their official company position.

I think fuel dealers are street-smart and have decided to take advantage of a disorganised fuel reserve system in Uganda. They have read the market demand situation so perfectly that until recently, petrol cost Shs 12,000 a litre in Lira and Shs 8,000 in Rukungiri.

If Ugandans are ready to pay these prices to drive their cars and power their generators, why should the fuel dealers under-sell, especially if their only motivation in business is making a profit?

And if my friend was dying to buy the expensive fuel, why should he be weeping after freely parting with his money? In a perfect situation, he would simply have abandoned his car the way many did, as a protest at the high fuel prices.

It is logical that if enough people refused to buy that fuel, the dealers would have backed down and sold it a price acceptable to the market. Arresting and detaining the dealers for overcharging consumers was useless, until the government reverses its liberalisation policy, at least on petroleum goods.