Why lower global fuel prices will not bring immediate relief to passengers

Business Reporter

Mwananchi Communications Ltd

Dar es Salaam. Commuters and long-distance travellers expecting an immediate reduction in transport fares following the recent easing of global fuel prices may need to wait longer, as regulators and operators maintain that fuel is only one component of the wider cost structure determining fares.

Expectations were rife that the easing of international oil prices after months of volatility driven by geopolitical tensions, including the conflict involving the United States and Iran, would directly lead to a fall in transport costs the same way the rise in global prices led to an immediate increase in transport costs.

For many households, transport has become one of the fastest-growing monthly expenses, particularly in urban areas where commuting is unavoidable.

Geopolitical tension as a result of the Iran crisis that started in February 2026 triggered higher fuel prices globally.

These led to a sharp increase in local pump prices. Petrol climbed to Sh4,086 per litre from Sh2,864 in March, while diesel increased to Sh4,333 from Sh2,858. Kerosene rose to Sh4,685 from Sh2,932 over the same period.

Following that development Land Transport Regulatory Authority (Latra) approved fare adjustments upwards after operators cited rising fuel costs and other operational expenses.

Commuter fares for short-distance routes of up to ten kilometres were raised from Sh600 to Sh700, while medium-distance journeys now cost up to Sh1,500 depending on distance.

Long-distance bus fares also increased, averaging Sh57.93 per kilometre on tarmac roads and Sh66.62 on gravel routes.

A typical Dar es Salaam–Arusha trip now costs more than Sh36,000. Ride-hailing services have increased fares by about 22 percent, while ferry charges between Dar es Salaam and Zanzibar range from Sh40,000 to Sh80,000 depending on class.

However, authorities say the recent decline in global fuel prices even if they lead to local reduction of the same would be insufficient to justify an immediate reduction in fares locally.

Speaking to The Citizen, Latra director general, Habibu Suluo, said fuel prices were only one of several factors considered in determining transport fares.

He said the earlier rise in fuel costs triggered increases in other inputs required for transport operations.

Fuel prices that were used in determining fares were not the sole reason behind the fare increases.

Rising fuel costs led to increases in the prices of spare parts, maintenance services, tyres, lubricants and other operational costs.

Mr Suluo said fare reviews involve broader consultations with stakeholders and assessments of the overall cost structure facing transport operators, rather than fuel prices alone.

Despite this explanation, many passengers say they expected a reduction in fares following the fall in global oil prices.

Godfrey Mushi, a trader who frequently travels between Dar es Salaam and Arusha, said transport remains one of his biggest business costs.

When fuel prices were going up, fares increased quickly. We expected reductions now that oil prices are falling. It would help reduce the cost of doing business,” he said.

Mbezi resident Rehema Juma, who uses commuter buses daily, said transport costs take up a significant share of her monthly income.

“We understand operators have other costs, but passengers are also struggling. Any reduction would make a difference,” she said.

Another commuter, Hamisi Salum, said fare increases are usually quick to reflect rising costs but slow to adjust when costs fall.

“When prices go up, fares increase immediately. But when costs fall, it takes longer for passengers to feel the benefit,” he said.

He noted that boda boda fares from Mbezi Luis to Mwenge have risen from Sh3,000 to Sh5,000 during peak hours.

Overall, experts indicate fare adjustments depend on broader operational costs, meaning passengers should not expect immediate relief from lower fuel prices yet soon.