City motorists pay more for fuel as prices hiked quietly

Thursday July 30 2020

 

By Rosemary Mirondo @mwaikama rmirondo@tz.nationmedia.com

Dar es Salaam. Retail price of petrol was increased without any official public communication even as the scheduled time for fuel price change had not reached.

The price of petrol was increased from Sh1,693 per litre in the city on July 1, this year to a maximum of Sh1,838 in some petrol stations while that of diesel and kerosene remained unchanged.

A random field visit conducted by The Citizen in the commercial capital yesterday also established that some stations were still selling within the limit announced on July 1 with other operators not selling at all.

Fuel prices are governed by rules of demand and supply but the Energy and Water Utilities Regulatory Authority (Ewura) publishes cap prices on the monthly basis.

The prices of petrol, diesel and kerosene, applicable in Tanzania Mainland, come out through official announcements every first Wednesday of a new month.

New prices were not expected until August 5, 2020 as per Ewura calendar.

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However, city motorists woke up on Monday to the surprise price hike, creating public anxiety over what would be silently going on in the crucial sector.

Tanzania Association of Oil Marketing Companies (Taomac) executive secretary Raphael Mgaya said there was an issue with traders who failed to off-load their petrol at the Dar es Salaam port in time incurring extra costs which they now need to recover.

“Some fuel companies were financially stressed in May due to Covid-19 and therefore could not off load their petrol since they failed to pay banks for letter of credit (LC). As a result, there were costs accrued from storage and defaulting,” said Mr Mgaya.

“These firms applied for petrol price hike to recover the costs estimated at Sh145 per litre. Ewura approved this change effective July 27,” he elaborated.

Asked about the petrol these firms were selling while their stock was at the port, Mr Mgaya said the companies were selling the stock that had remained in the previous month.

This is even as Tanzania imports petroleum products through Bulk Procurement System to ensure reliable supply of fuel in the country.

The importation is done some two months before the actual selling. For instance, petrol supplied to the market in July was imported in May.

When reached for comment, Ewura’s communications and public relations manager Titus Kaguo promised to get back to The Citizen on the matter and elaborate but by press time he had not, and did not respond to calls and text messages sent to him.

On Friday, Ewura allayed fears of possible fuel shortages in an election year after reports of fuel shortages among retailers.

The government also recently accused oil companies of orchestrating market shortages and ordered investigations that saw several oil firm top executives held for questioning.

Ewura said last week that it had ordered the procurement of fuel by a state agency to ensure supplies of the commodity during the forthcoming elections.

Fears for oil crisis are not a new thing during the electioneering process in Tanzania.

In 2015, a decision to avert a possible oil shortage during elections ended disastrously when Tanzanians were given a raw deal, resulting into a scandal that tainted the otherwise good intention by some authorities.