What new reduction in fuel prices means for Tanzanians

Dar es Salaam. The reduction of fuel pump prices, propelled by a drop in global charges, offers hope that Tanzanians will feel only a minimal impact of a recently introduced Sh100 per litre levy on petrol and diesel.

The Energy and Water Utilities Regulatory Authority (Ewura) cut the price cap for a litre of petrol and diesel imported through the Dar es Salaam port by 4.7 percent and 4.4 percent respectively, thanks to a reduction in global prices.

The new rates means that petrol and diesel imported via the Dar es Salaam port will go down by Sh137 and Sh118 respectively.

“These changes in fuel prices were triggered by changes in the global market prices, costs of Bulk Procurement System (BPS) premiums and value of Shillings against the US Dollar,” reads a part of the Ewura statement.

The decrease in prices comes at a time when the government has introduced a new Sh100 levy on petrol and diesel in its effort to speed up the implementation of strategic projects.

Analysts say the decrease was an indication that the impact of the levy on Tanzanian motorists will be minimal.

“The levy has come at a time when the global fuel prices are down and as a matter of fact, the pinch of the new levy will be minimal,” said Tanzania Association of Oil Marketing Companies (Taomac) executive director Raphael Mgaya.

 He appreciated Ewura and the government at large for ensuring that the fuel prices reflected the costs of importation and distribution.

Backing up his sentiments, Mr Mgaya said without revealing the figures, the exchange rate that was being used in the process of importing fuel was reflecting their operational costs.

The just introduced levy of Sh100 in fuel has so far not been charged to importers of the fuel that is currently available in the market.

This is due to the fact that by the time they were being imported in May, the levy was not already there.

“The new levy will be applicable to the fuel that we imported in June. The consignment will arrive in the country this month and taken to the market in August,” said Mr Mgaya.

However, the Tanzania Petrol Station Operators Association (Tapsoa) had a different viewpoint, saying the levy could be charged with effect from yesterday to pave allow a level playing field.

“We will not wait until August to take to the market the consignment that will start arriving in the country today,” he told The Citizen’s sister newspaper, Mwananchi.

With effect from yesterday, motorists started to dig less into their pocket compared to the previous month.

With the new published prices cap, a litre of petrol is now sold at Sh2,736 and that of diesel is purchased at Sh2,544, according to Ewura.

For the Northern regions, which include Tanga, Kilimanjaro, Arusha and Manyara, retail price of a litre of petrol went down by Sh188.

However, for consumers of diesel in the regions, it was more of pain than gain as they have to dig deeper into their pocket following a Sh58 increase per litre of the product.

For the Southern regions of Lindi, Mtwara and Ruvuma, the price of diesel will remain the same as announced on June 7 as there was no new consignment that was received through Mtwara port in June.

Following the shortage of petrol in Mtwara storage facilities, petrol station operators in the Southern regions should take fuel from Dar port.

As a matter of fact, the retail price should reflect Dar’s price and factor in transport costs from Dar es Salaam to the respective regions.