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HomeAfricaDevalued Tanzania shilling sparks hike in fuel prices

Devalued Tanzania shilling sparks hike in fuel prices

Motorists in Tanzania on Monday woke to a shock hike in oil prices after a fortnight of disruption in fuel supplies that nearly brought the country’s transport sector and several industries to a standstill.

Announcing a nearly 6% increase in the prices of petrol, diesel and kerosene with immediate effect, the Energy and Water Utilities Regulatory Authority (EWURA) cited progressive devaluation of the Tanzanian shilling and fluctuating cost of petroleum on the world market as factors that it took into account in fixing indicative prices for filling stations.

EWURA’s marketing manager, Godwin Samwel, said the new cost of Tsh 2,114.13 for a litre of petrol in Dar es Salaam would apply for the next two weeks. Oil prices vary upward depending on the distance of towns from the main depots here.

“The value of the shilling against other convertible currencies has gone down by about 3%, while prices of crude oil in international markets were up by 5.4%,” Samwel said.

Currently, a US dollar sells for approximately Tsh 1,620.

Samwel said the retail indicative price of petrol had gone up by 5.51%, while diesel was up by 6.3% and kerosene was 5.51%.

“Under the old pricing formula, both wholesale and retail prices could have been higher,” he said.

According to the official, oil marketing companies were free to sell their products at a price that gives them competitive advantage, provided it does not exceed the price cap for the relevant product.

EWURA computes its oil prices on the basis of world market levels during the previous month.

“In line with the prevailing sector legislation, prices of petroleum products are governed by rules of supply and demand,” Samwel added.

When the same authority cut down fuel prices by 9.17% two weeks ago, oil importing and marketing companies in the country closed the business in protest.

Oil supplies resumed gradually towards the weekend as the companies bowed to the government’s compliance order.

Only BP Tanzania Limited defied the order. Consequently, the government slapped a three-month suspension order on the firm and barred it from distributing petrol, diesel and kerosene.

BP Tanzania, however, continues to market heavy furnace oil and jet fuel.

Meanwhile, motorists here have reacted differently to the new oil prices some saying the increase was inevitable and others blaming EWURA, as a government agency, for failure to do its homework properly before setting prices.

“The authority must ensure that its decisions hurt neither oil marketing companies nor consumers. The common man here suffers in silence for problems caused by the insensitive nature of such state agencies,” a rickshaw taxi operator told PANA

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