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ACT offer solutions to nation's latest fuel crisis
What you need to know:
- On Friday evening, Energy Minister January Makamba met with the leaders of the Tanzania Association of Oil Marketing Companies (Taomac) in Dar es Salaam to discuss the current situation and future prospects.
Dar es Salaam. Following a recent hike in the price of fuel, the opposition party ACT Wazalendo has advised the Tanzanian government to take immediate measures to reduce the use of foreign currency for importing goods and services from abroad.
The Energy and Water Services Regulatory Authority (Ewura) announced new prices for petrol, diesel, and kerosene on August 2nd, indicating a significant increase in retail prices.
According to Ewura, petrol prices have risen by Sh463, equivalent to 16.9 percent, from Sh2,736 in July to Sh3,199 this month.
Diesel prices have also increased by Sh391, equivalent to 15.3 percent, from Sh2,544 in July to Sh2,935 this month in Dar es Salaam. The price changes were attributed to challenges in the availability of US dollars, changes in tax policies, and an increase in fuel costs in the world market (FOB) and import costs (premium).
In response to the fuel price hike, ACT Wazalendo, in a statement issued yesterday signed by Energy sector spokesperson Is-haka Mchinjita, and Finance and Economy section spokesperson Ester Thomas, has called on the government to adopt renewable energy as a solution.
The party proposed that all government vehicles should start using natural gas (CNG) to reduce the reliance on foreign currency for fuel imports, potentially saving the government around Sh500 billion annually.
Furthermore, the opposition party urged the government to prioritize the implementation of the Mchuchuma and Liganga project to produce steel products domestically and for export. This move could save over $1.1 billion in foreign currency that is currently used to import steel. Additionally, ACT Wazalendo recommended speeding up the Lindi Natural Gas (LNG) processing project and linking it to the establishment of a large fertilizer plant to reduce the foreign currency expenditure on importing fertilizers, which amounted to $503 million in 2022.
“The Tanzania Petroleum Development Corporation (TPDC) should build enough reserves to store at least enough oil for six months so that price changes in the world market do not affect the country’s economy,” the statement reads in part. ACT Wazalendo also suggested the restoration of fuel subsidies for petrol and diesel.
ACT Wazalendo further called on the government to increase exports of agricultural products, such as cashew nuts and soybeans, to boost revenue. These high-value crops have the potential to bring in up to $500 million and $1 billion annually, respectively.
Makamba meets suppliers
On Friday evening, Energy Minister January Makamba met with the leaders of the Tanzania Association of Oil Marketing Companies (Taomac) in Dar es Salaam to discuss the current situation and future prospects. Taomac vice chairman Mr Salim Baabde expressed concerns that the shortage of US dollars in the market was affecting fuel imports.
He urged the government to accelerate efforts to ensure the availability of the dollar through commercial banks, warning that the situation may worsen if not addressed promptly.
Mr Makamba thanked the oil suppliers for ensuring the availability of fuel and assured them that the government is aware of the challenges facing the energy sector.
He emphasized that the government is taking bold measures to restore normalcy. “Our ministry is always open for discussions and consultations. Anyone is welcome,” he said.
“The government is aware of the challenges facing the energy sector and bold measures are being taken to restore the situation to normalcy,” he added.
