Despite the public outcry, fuel prices in Tanzania are the lowest in the region

Executive Director, TAOMAC

Tanzania Association of Oil Marketing Companies

In Tanzania, petroleum products prices are regulated by Ewura under the Ewura Act (CAP. 414), Petroleum Act (CAP. 392) and the Ewura (Petroleum Products Price Setting) Rules, 2009. Under Section 166 of the Petroleum Act - read with Section 40 of the Ewura Act - Ewura is empowered to regulate petroleum products prices. Ewura sets prices for each month and publishes them on the first Wednesday of the month by using a pricing formula set out in Rule 5 of the Ewura (Petroleum Products Price Setting) Rules. The Pricing Formula comprise the following elements: CIF costs, local Government charges and levies, Government taxes, distribution costs and distribution margins. All of these elements of the formula are fixed - except the CIF costs, which change depending on the prices of oil in the world market. This is in fact the single greatest contributor to changes of local pump prices.

In the early hours of Wednesday, 1st September 2021, Ewura published cap prices for use in the month of September with effect from September 1, 2021 to October 5, 2021 showing an increase in the prices of petroleum products that were imported via all the three ports in the country namely Dar es Salaam, Tanga and Mtwara. On the same day, i.e., in the afternoon of Wednesday, September 1, Ewura announced that it had suspended with immediate effect the application of the Cap Prices that were published earlier on the same day and directed all oil marketing companies and retailers to continue using the cap prices that were published on August 4, 2021. Unfortunately, well-intentioned as it might be, this decision may have a devastating impact on the industry future. OMCs and retailers have now been compelled to sell their products at loss and this might impact on their ability to finance future stocks and risk the country running short of fuel supply.

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Despite the public outcry, fuel prices in Tanzania are the lowest in the region

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