Rising oil prices threaten stability

Monday September 3 2018

 

By Halili Letea @hletea news@tz.nationmedia.com

Dar es Salaam. The rising global oil price is threatening the stability of prices of goods and services in Tanzania.

The Bank of Tanzania (BoT) economic bulletin for the quarter ended in June 2018 shows that production cut and higher global demand for crude oil have pushed the prices up by more than 40 per cent in the second quarter of the year, which ended in June 2018, a new report has revealed.

The report indicated that the average of Brent, Dubai and West Texas Intermediate oil prices rose by 44.6 per cent to $71.5 per barrel in June 2018 from $49.4 per barrel recorded on June 2017 while Free on Board (fob) oil in Dubai rose by 44.3 per cent to $71.8 per barrel from $49.7 per barrel during that period. “The price of crude oil and white petroleum products increased due to poor supply following continued production cut by the Organisation of Petroleum Exporting Countries (Opec) members,” stated the report.

The price of oil might continue to rise in the future, according to the US bank forecast, which shows that the world oil prices will remain high during this second half of the year, despite increased crude oil production. For Tanzania, the Energy and Water Utilities Regulatory Authority (Ewura) has already announced new fuel prices, citing the increase in the world price.

The US-based Morgan Stanley has been quoted as saying the fuel price might hike to $85 this year as President Donald Trump targets Iranian barrels. Morgan Stanley raised its forecast for Brent crude prices by $7.50 to $85 a barrel for the second half of 2018.