Pain in store as fuel prices continue to rise nationwide

Dar es Salaam. Tanzanians will have to dig deeper into their pockets after fuel prices rose yet again.

The new prices announced yesterday came a week after the government rejected an appeal by MPs for a Sh50 levy on every litre of petroleum products, with the proceeds going into the ring-fenced Water Development Fund (WDF).

Winding up the debate on the Sh32.5 trillion Budget for 2018/19 in Parliament last week, Finance and Planning minister Philip Mpango said the government concluded that adopting the proposal would have devastating outcomes on the country’s economic stability plans.

Revealing that the government had concluded that this was not the right time to hike petroleum taxes due to rising global petroleum prices, Dr Mpango said hiking the taxes on petroleum would result in “second-round effects”.

These are the reactions of market participants to specific earlier increases/decreases in the prices of individual goods or services. In this particular case, “second-round effects” refer to an increase in the prices of products that are manufactured using petroleum as an input.

According to Dr Mpango, petroleum products are already heavily taxed, with up to 19 types of taxes levied on petroleum by different agencies.

The Energy and Water Utilities Regulatory Authority (Ewura) yesterday released its cap prices for petroleum products, increasing retail prices for petrol and diesel by Sh126 and Sh166 per litre, respectively.

“The increase is largely attributed to continued increases in world market prices. The increases of local prices in July 2018 are, therefore, due to the consecutive increases in world oil market prices in April 2018 and May 2018,” Ewura said on its website.

Petroleum product prices in Tanzania had been relatively stable for almost two years.

In August 2015, petrol and diesel prices reached Sh2,290 and Sh2,026 per litre, respectively, in Dar es Salaam before dropping to Sh1,955 and Sh1,846, respectively, in January 2016.

With the new rates, Dar es Salaam consumers will now be paying Sh2,409 and Sh2,329 per litre of petrol and diesel, respectively.

Consumers in Ukerewe District in Mwanza Region, Bukoba and Kyerwa in Kagera Region, and Kigoma Region will pay prices that are above Sh2,600. In Ukerewe, the retail price for petrol is capped at Sh2,618 a litre, while in Kyerwa, the price is capped at Sh2,646.

Likewise, the price in Kigoma Region is generally above Sh2,600, with consumers in Uvinza District paying the highest prices: Sh2,652 and Sh2,573 per litre of petrol and diesel, respectively.

Consumers say the increases are a major setback on their profit margins.

“Prices are always unstable, always increasing. How do we get enough money to make ends meet?” asked Mr Felix Makoye, a commuter driver whose bus plies the Tabata-Segerea-Makumbusho route in Dar es Salaam.

A Bajaj taxi operator at Mwenge, Mr Hassan Abdallah, said he will have to transfer the burden onto his customers.