DAR ES SALAAM, Tanzania
Tanzanians face more squeeze
on household budgets and harsher time with the increase in fuel prices from Wednesday, despite a
government subsidy.
The Energy and Water Utilities Regulatory
Authority (EWURA) reports that prices for gasoline, fuel, and kerosene
have reached previously unheard-of heights in the local market.
Ewura, this month set the new retail prices at Tsh3,410 ($1.48) for
a litre of petrol and Tsh3,322 ($1.42) for diesel in Dar es Salaam on the back
of the increased cost of fuel in the global market when it made its purchase in
June.
“The prices of oil in the
world market continue to rise and thus causing fuel prices in the local market
to increase as well,” said Modestus Lumato, Ewura’s Director-General, in the
monthly review.
Kerosene prices recorded the
highest jump to Tsh3,700 ($1.59) a litre, up from Tsh3,442 ($1.47) a litre in
July, a Tsh258 ($0.11) increase.
Petrol shot up by Tsh190
($0.81) up from Tsh3,220 ($1.38) last month, while diesel was up Tsh179 ($0.08)
from Tsh3,143 ($1.34).
“For Tsh10,000 ($4.29), one
will only get two litres of either petrol or diesel and some change,” lamented
Sunday John, a motorist in Kigoma on the August review.
The prices will pile more
pressure on households and motorists, given that diesel is a key determinant of
the basket of goods and services used to measure inflation.
Producers of services such as
electricity and manufactured goods usually factor in the higher cost of
petroleum.
Without the fuel subsidy, Lumato said a litre of petrol would have jumped to Tsh3,630 ($1.57) in Dar es salaam and
Tsh3,762 ($1.61) in Mtwara, in southern Tanzania, about 564km from the coastal
commercial hub of Dar es Salaam.
He further said that oil marketing companies are
free to sell their products at a price that gives them a competitive advantage
provided that such price does not exceed the price cap.
Tanzania introduced a Tsh100
billion ($42 million) monthly subsidy in June but has done nothing to ease the
cost.
The Minister of Energy,
January Makamba on May 10 this year, said the government has provided a subsidy
of TSh100 billion to reduce fuel prices in the country.Minister of Energy, January Makamba (L) in a discussion with President Samia Hassan (File)
“Our President, Samia Suluhu
Hassan has instructed that the next financial year was far away, therefore
recovery should be sought sooner. Therefore, as an emergency measure, in this
period before we reach the new financial year, the Government will dedicate TSh100
billion to reduce oil prices in the country.
President Samia Hassan
directed ministries and authority responsible to address immediately fuel price
hike and come up with a quick solution.
In June, Tanzania
signed a framework agreement with Equinor of
Norway and Shell of the United Kingdom, bringing them one step closer to
starting construction on a $30 billion project to export liquefied natural gas
(LNG).
The agreement calls for a final investment decision by 2025 and the start of operations at a liquefied natural gas plant to be built in Tanzania’s southern coastal town of Lindi by 2029-2030. - Africa
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