Fuel prices up only marginally after move on levies, charges

Dar es Salaam. Motorists in Tanzania will be saving Sh133 on every litre of petroleum products they purchase from today following the government’s intervention on rising fuel prices.

The new cap prices, which were announced yesterday and which become effective today, signify a rise of only Sh12/litre.

“If the government had not intervened, the actual price rise would be Sh145/litre,” said the acting director general of the Energy and Water Regulatory Authority (Ewura), Mr Godfrey Chibulunje.

The new prices mean that Dar es Salaam residents will now pay Sh2,439, Sh2,261 and Sh2,188 for a litre of petrol, diesel and kerosene, respectively.

Compensation

But in a quick reaction, fuel traders said that while the decision was good, it was also about time they were compensated for the loss they will be incurring in the process.

Tanzania Petrol Station Owners Association (Tapsoa) yesterday that while they were happy with the government’s decision, it would also be meaningful if they were compensated because they had paid all the levies, fees and charges for the consignment that is currently at filling stations.

“We are asking the government to compensate us for the loss because our current price is not reflective of how much we paid when the product was being imported some months back.Even in September, the government had intervened and the prices that were to be applied that month could not be effected,” said Tapsoa secretary Augustino Mmasi.

Tapsoa, which boasts of 678 members who operate over 1,800 filling stations, is of the view that the government should come up with a special fund which will be used to regulate fuel prices.

Earlier yesterday, the director of Presidential Communications at State House, Mr Jaffar Haniu, said President Samia Suluhu Hassan had directed her lieutenants to reduce a total of Sh102 billion for the whole year in various levies, fees and charges on fuel.

Apart from rising world market prices and the value of the Tanzanian shilling against the United States dollar, pump prices in Tanzania are also determined by other factors including taxes, levies, fees and charges which are payable to government institutions, agencies and departments.

These include Wharfage, Railway Development Levy, Customs Processing Fee, Weights and Measures Agency (WMA) Fee, Tanzania Bureau of

Others are TBS charges, Tanzania Shipping Agency Corporation (Tasac) charges, Energy and Water Utilities Regulatory Authority (Ewura) fee, fuel marking fee, demurrage costs, and surveyors’ costs.

The list also has financing costs, evaporation losses, fuel levy, excise duty, petroleum fee, charges payable to executive agencies, and service levy payable to local government authorities at both wholesale and retail levels.

These levies, fees and charges account for over 40 percent of what consumers pay for a litre of fuel.

In an effort to ensure that prices remain stable at a time global ones were on the rise, the government last month formed a team which comprised of experts from Ewura, Tanzania Revenue Authority (TRA) and the Ministry of Energy among others and tasked it with the responsibility of reviewing the levies, taxes, fees and charges.

Working on the recommendations by the team, President Hassan directed yesterday that the levies, fees and charges should be reduced by Sh102 billion per year.

Mr Haniu said President Hassan issued the directive when she received team’s report from the Minister for Energy, Mr January Makamba.

“Implementation of the President’s directives will go hand in hand with a review of various regulations governing the levies, fees and charges which will be published in the Government Notice on October 5, 2021,” the statement reads.

According to the statement, the directive to reduce the levies, fees and charges will affect Ewura, Tanzania Ports Authority (TPA), TRA, TBS, WMA and Local Government Authorities for Kigamboni, Temeke, Tanga and Mtwara.

The President also directed her lieutenants to quickly go through all the laws government fuel and move a motion for amendments in Parliament.

“The aim is to protect a Tanzanian consumer against costs that stem from rising fuel prices,” the statement reads.

Apart from Mr Makamba, presentation of the report was also attended by Finance and Planning Minister Mwigulu Nchemba, Industry and Trade minister Prof Kitila Mkumbo, Minister of State in the President’s Office (Regional Administration and Local Government Authorities) Ummy Mwalimu as well as Works and Transport Minister Prof Makame.

Also in attendance were: Energy Deputy Minister Stephen Byabato, Attorney General Eliezer Feleshi, Permanent Secretary in the Ministry of Energy Leonard Masanja and his deputy Kheri Mahimbali among others.

Escalating

Global fuel prices have been on the rise during recent months and yesterday, they [prices] surged to new multi-year peaks, extending a bullish run one day after 23 petroleum exporting countries refrained from boosting output any further.

The European benchmark London Brent North Sea oil jumped to a new three-year peak at $82.72 per barrel while the New York crude zoomed to a fresh seven-year pinnacle at $78.88.