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Tanzania government takes charge of fuel imports

With fuel costs putting a pinch in every Tanzanian’s budget, the country’s Finance Minister, Mustafa Haldi Mkulo, announced Wednesday the government would revert to bulk procurement of all petroleum products and let private companies carry on with local distribution of the products.

In addition, the minister said the government would in two weeks time announce a waiver of several levies charged on every litre of fuel in order to ease transport costs, stimulate productivity in all sectors of the economy and make oil marketing transparent.

Official statistics show that Tanzania imports 1.7 million metric tonnes of petrol, diesel, kerosene and jet fuel a year but private oil marketing companies put the total figure at 1.3 million tonnes.

Petrol prices at filling stations vary between Tsh 2,167 per litre in Dar es Salaam and up to Tsh 2,415 in far-flung towns (US$ 1 = Tsh 1,509).

Tabling government budget estimates for fiscal year 2011/12 in parliament, Mkulo said the government intended to kick-start electricity generation projects that would add 1,000 megawatts to the national grid in the coming year.

Due to below-normal rainfall in the past year, Tanzanians are currently experiencing rolling blackouts because the water level on hydropower generation dams has dropped and the natural gas-driven power plant here is under repair.

“The government is keen to reduce dependency on external support for its yearly budget,” Mkulo said, adding that every public or private investment should aim at propelling economic growth and poverty reduction.

He urged small and big farmers to practise irrigation farming in order to mitigate the effects of recurrent drought, saying that the government has set aside enough money to beef up the national grains reserve.

In a bid to cut down youth unemployment, the minister said the government would receive a US$ 60 million loan from the World Bank for the development of an agricultural corridor, stretching across the country’s southern regions.

The proposed project involves a number of development partners, he said.

Though there has been marked improvement in tax collections over the past two years, the minister decried increased mismanagement of public funds by regional and local authorities.

Mkulo also announced a new tax payment system that will cover every business in the informal sector and involve village and local authorities in collection of the revenue


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