Fuel prices down almost 7 per cent

Effective today, most all fuel prices at the pump will drop by over 100/-, Energy Water Utility Regulatory Authority (EWURA) has announced and said that were it not for the depreciating Tanzanian shilling, the prices would have dropped even more.

Prices per litre for petrol, diesel and kerosene today drop by 149/- (6.83 per cent), 119/- (5.85 per cent) and 106/- (5.31 per cent) respectively, the Authority has said.

Apart from the retail price, the wholesale prices have also decreased by 148.66/- (7.16 per cent), 118.69/- (6.16 per cent) and 105.81/- (5.59 per cent) for petrol, diesel and kerosene respectively.

“This notable drop in retail and wholesale prices is the result of continued falling of World Oil Market prices and a decrease in the supplier’s premium rates,” EWURA Director General Felix Ngamlagosi explained in statement issued yesterday.

“Prices would have dropped further had it not been for depreciation of the Tanzanian Shilling against the USD,” he went on to explain.

He said EWURA shall continue to encourage competition in the sector by making available petroleum products pricing information including the price caps.

“This information on prices is intended to enable stakeholders make informed decisions on petroleum prices at a particular time,” he noted.

“Oil marketing companies are free to sell their products at a price that gives them competitive advantage, provided that such prices do not exceed the price cap for the relevant product,” he added citing that the approved formula was gazetted through Government Notice No. 432 of November 29, 2013.

Commenting, renowned economist, Dr Joseph Massawe said while generally speaking, fluctuations in the price of petroleum products have a direct impact on the prices of other products and services as well, today’s drop of fuel prices may not necessarily lead to the reduction in prices for other commodities and services.

 “Generally, the prices of things and transport costs are supposed to equally reduced but the fuel price reduction may not be 100 per cent reflected due to other fluctuating factors like exchange rates between Tanzanian shilling against major currencies,” he cautioned.

He said other factors that may lead to the low reflection of the fuel price drop in include poor infrastructures like roads and prices of vehicle and machinery spare parts.

“Fuel is a very important component in the economy…with other factors generally being constant, when the prices are up, the price for almost all other things also goes up and vice versa,” he said.

 “With the current reduction, we expect the inflation to be reduced,” the economics guru projected.

Last month, the price for petroleum products also decreased. The retail prices for petrol, diesel and kerosene respectively decreased by 14/- (0.66 per cent), 37/- (1.81 per cent) and 22/- (1.10 per cent) per litre.

Similarly, wholesale prices of petrol, diesel and kerosene dropped by 14.40/- (0.69 per cent), 37.32/- (1.90 per cent) and 22.17/- (1.16 per cent) per litre respectively. 

 Elsewhere in the world, it is reported that consumers have so far got only a fraction of the steep fall in crude prices, says the Economic Times citing that Brent crude has dropped about 40% since June, but the price of petrol, diesel, jet fuel and commercial LPG have fallen barely 8%-17%.

Officials explain that the price movement of international crude oil and global petroleum products are often not same and that international crude prices fall faster than global prices of petroleum products on which domestic retail prices of petrol, diesel and cooking gas are based on.