The authority made the clarification in Dar es Salaam yesterday, following alarming concerns from various stakeholders on why fuel in the local market was sold at high prices despite crude oil’s price fall at the world market.

 

Prices for crude oil in the world market continued to drop significantly from USD100 per barrel in June last year to USD 60 to-date.

 

EWURA Director General, Felix Ngamlagosi said there are fixed costs of importing oil which impact on the trend prices of the key commodity in the local market.

 

“Unlike in the oil producing countries, Tanzania has to incur shipping costs, fixed rates of distribution, fixed taxes among others weakening of shilling against trading US dollar also posses challenges in price calculation of oil for local consumption.”

According to him, such shortfalls accounts for 40 percent to the cap price of oil in the local market.

 

He maintained however, that the price of petroleum products in the country has been decreasing consecutively and that oil price will drop further in the forthcoming imports especially as the price of crude oil drops.

 

However, EWURA issued new price caps for petrol, diesel and kerosene indicating a decline of 74/- (about 3.6 percent), 62/- (3.2 percent) and 54/- (2.88 percent) respectively.

 

 

Ngamlagosi elaborated that such decrease in oil price is a typical relief to the country’s economy which strongly depends on oil import.

 

“This is a big and direct relief to us. And its contrast to oil producing countries,” he said noting that the new prices will start today and will be reviewed next month.

 

In addition, the authority noted that while the refined petroleum products in the world market, for petrol, diesel and kerosene dropped by a total of USD249 per metric tons, USD189/MT and USD180/MT respectively, the oil price at the local market between September 2014 and January 2015 has dropped by 311/litre, 244/litre, and 207/litre respectively.

 

During the period, the Tanzania shilling depreciated by 4 percent, he said, the drop in the local market prices would have been higher, had the local currency stabilized.

 

Kigoma North MP Zitto Kabwe expressed concerns last Sunday that it was the right of the citizen to know why the price of fuel is still high amid lower fuel prices at the global market.

He was of the view that if it were about crude oil price going up in the world market, the impact would have been very quickly felt in the country.

 

In 1969, Tanzania through the Tanzania Petroleum Development Corporation (TPDC) took-over the Tanzanian and Italian Petroleum Refining Company Limited (TIPER) chiefly for refining petroleum products before they reach consumers.

 

TIPER which was owned by the Treasury by 50 percent shares and Agip by 50 percent was privatized and subsequently changed hands to Tanzania International Petroleum Reserves Limited (TIPER) which now stores petroleum products.

 

The firm had recently announced major investments to increase its storage capacity to 300,000 cubic metres from its current operational capacity of 147,000, m3, in the next five years.