Fuel increased 58 percent last year as demand increased

By Stephano Simbeye

Dar es Salaam. Fuel prices have risen 58 percent in the past 12 months due to increasing global demand and rising local taxes and duties.

Dar es Salaam motorists are currently paying Sh2,405 per liter of gasoline, up from Sh1,520 last June, data available shows.

In simpler perspectives, this means that in July 2021 in Dar es Salaam Sh885 you have to pay more to get a liter of gasoline than the same person paid for the same amount of the product 12 months ago.

The final adjustments were made on July 1, 2021 as the government tries to collect Sh100 as a fuel levy in line with the Sh36.68 trillion budget for the 2021/22 fiscal year.

But with global prices rising, the increase had to go beyond the Sh100 fuel levy, with the Energy and Water Utility Regulatory Authority (Ewura) eventually increasing retail gasoline, diesel and kerosene prices by Sh156, Sh142 and Sh164 per liter, respectively, in July 2021 for those products imported through the port of Dar es Salaam.

The high cost of fuel is largely due to numerous taxes, levies and fees due to the government, some of its agencies and departments.

A calculation of how the liter of gasoline price is calculated shows that between 30 and 40 percent of it actually goes to the state, its offices and offices in the form of taxes, levies and regulatory fees.

It is for this very reason that fuel prices are cheaper in some countries that import the product through the ports of Tanzania and elsewhere.

In Songwe, for example, some motorcycle taxi drivers, popularly known as bodabodas, are reportedly crossing the border into Zambia, where fuel prices are hundreds of shillings cheaper than the Tunduma-Tanzania border.

The maximum price of gasoline in Tunduma is 2,526 Sh., But the same brings in less than 2,000 Sh.

Mr. Elias Mahenge, who owns a vehicle in Tunduma, and a truck driver, Mr. Martin Msowela, told The Citizen yesterday that they were being forced to buy the product in Zambia through bodabodas to get some respite.

“It is a blessing for us to cross the border to buy the product on this site as it lowers our operating costs as we have not increased our fees despite rising fuel prices,” said Mr. Msowela.

A Bodaboda driver, Richard Simyota, shared similar views, but noted that they sometimes find it difficult to evade Zambian security guards when buying fuel informally.

An Ilasi gas station manager Happy Asajile said the number of vehicles being refueled at his gas station has decreased due to the price increase.

“We are losing to our colleagues from Nakonde, where the prices are better,” he said.

Tanzania best in EAC

Despite the recent spike, fuel prices in Tanzania remain lower compared to its competitors in East Africa.

In Kenya, for example, gasoline costs Ksh124.72 (around Sh2,619) in the port city of Mombasa, while the same in Nairobi costs Ksh 127.14 (around Sh2,669).

In Uganda, a liter of petrol in Kampala was trading for 4,150 USh (about 2,573 Sh.) Until a few weeks ago, but it has been reported to have risen since then.

Additional reporting from Stephano Simbeye in Tunduma