Oil marketers predict local fuel prices will stabilise this year

Dar es Salaam. The predictions for the stability of fuel prices is in after the petroleum products started the year 2023 with mixed directions.

While diesel and kerosene prices increased for January 2023, the petrol prices had mixed behaviour depending on the transit port.

According to the Energy and Water Utilities Regulatory Authority (Ewura), the pump prices of petrol imported through the Dar es Salaam port decreased by Sh8 per litre, while that of Tanga and Mtwara ports increased by Sh164 and Sh168 per litre, respectively, compared to their prices in December 2022.

The diesel for Dar es Salaam, Tanga and Mtwara increased by Sh48, Sh91 and Sh135 per litre, respectively, according to the regulator.

On the other hand, the price of kerosene in Dar es Salaam decreased by Sh49 per litre.

“Increase in cap prices are attributed to changes in FOB, premium and appreciation of the United States dollar against shilling,” Ewura said in a statement.

Thus in January motorists in Dar will start to pay Sh2,819 a litre for petrol, Sh3,295 a litre for diesel, and Sh3,203 for kerosene.

The costly price for a litre of petrol in January 2023 will be: at Ngorongoro (Loliondo) in Arusha Region motorists will pay Sh3,121 and in Nyasa (Mbamba bay) in Ruvuma Region the retail price is at Sh3, 116 per litre of petrol.

However, market stakeholders believe that regardless of the ongoing Russia-Ukraine war and the Covid-19 re-emergence in China, the local market can maintain stability in the next few months.

Speaking to The Citizen, executive director of the Tanzania Association of Oil Marketing Companies (Taomac), Raphael Mgaya, said regardless of the slight increase in the costs of fuel, the local market has had low volatility and become a bit steady.

“The market has more experience with the trends of the global market, and there has not been a dramatic shock, thus we see the great potential for stability,” he said.

Mr Mgaya said stakeholders hold the sentiment that the market will continue to hold steadiness in the coming months with nothing but small shocks that will not result in skyrocketing of the prices.

“There are fears of Covid-19 re-emerging and some countries have started putting restrictions but we do not expect this to have a huge impact on the prices,” he said.

At the moment, China is getting hit badly by the new wave of Covid-19 and there has been a surge of daily positive cases, according to the World Health Organization (WHO).

This re-emergence of the pandemic coupled with the continuing drag from the war in Ukraine as well as inflation pressures is said to have affected the country’s economic growth and eventually the world because the same is also happening to other big economies.

The International Monetary Fund (IMF) has recently cut its outlook for global economic growth in 2023 attributing it to the economic spillover from the war, pandemic, and the high-interest rates engineered by central banks aimed at bringing those prices pressures to heel.