Fuel drops slightly after July’s sudden price rise

Dodoma. Motorists in Dar es Salaam will from today pay Sh6 less for every litre of petrol they buy.

New prices announced yesterday came in the wake of a sudden rise in petrol prices last month.

Many consumers in Dar es Salaam were caught by surprise when the price of petrol in the city rose by Sh145 to Sh1,838 per litre at some filling stations.

It was the second increase within a month, and came after the Energy and Water Utilities Regulatory Authority (Ewura) increased the price in Dar es Salaam to Sh1,693 at the beginning of last month.

Ewura communications and public relations manager Titus Kaguo said yesterday that the abrupt price increase towards the end of last month followed a decision to allow into the market fuel imported at a higher price. The decision was reached in order to avert an “imminent” fuel shortage.

“We reached a point where all that we had to think about was uninterrupted supply of the commodity. What happened was that the arrival of a fuel tanker was delayed. All we had in the country was a consignment that was imported at prices that were applicable in March,” Mr Kaguo said.

He said, the consignment – which was imported at the price of $560 per tonne – was in the country under a “financial hold” arrangement, which is when one has to pay an overdue balance before the consignment is released.

At that time, the consignment that was being sold in the country was the one that had been imported at the price of $250 per tonne.

“We had to choose between fuel being sold at a higher price and no fuel at all. We chose the first option, and so we allowed marketers to bring the fuel into the market and sell it at a higher price,” he said.

Compared to the price that was announced on July 1, motorists will from today pay Sh139 more than what they paid in early July.

In Dar es Salaam, a litre of petrol will fetch Sh1,832, while diesel will rise by Sh69 to Sh1,785.

In Tanga, Arusha, Kilimanjaro and Manyara regions, a litre of petrol will cost Sh214 more, while in Mtwara it will rise by Sh68.

Meanwhile, Ewura dispelled fears of a fuel shortage, saying ongoing petrol scarcity in some regions was largely due to a rise in demand.

The authority said in a statement that fuel demand had increased by 21.23 percent in the last few months, resulting in supply hiccups in some areas of Katavi and Mara regions.

“In 2019, daily petrol demand in the country stood at 3.65 million litres, but by June 2020 it had risen to 3.683 million litres. As of July 2020, demand rose further to 4.425 million litres, translating into a demand rise of 21 percent,” the statement said.

Despite the rise, Ewura said, petroleum products held at marketers’ storage facilities were enough to meet the country’s needs.

That notwithstanding, the authorities decided to import 189.639 million litres of petrol between July 29 and August 31. According to the statement, there was no shortage of diesel but in anticipation of a further rise in petrol demand as the country heads towards the October General Election, the Petroleum Bulk Procurement Agency has been directed to raise its daily consumption estimates to 4.812 million litres between September and October.