Fairer oil purchase deal needed

Fairer oil purchase deal needed

According to them, the current conditions where local firms are not involved. There is also lack of competition, which is necessary to make prices go down as earlier expected when the system became effective in January.

An official with the Energy and Water Utilities Regulatory Authority (EWURA), Engineer Godwin Samwel, said prices qouted by importers in Kenya and Mozambique are far higher than those quoted by their counterparts in Tanzania.

He said the premium of about USD 60 per metric tonne quoted by the importer in Tanzania, in Kenya and Mozambique it is USD 25. Oil is an important commodity in life and the economy and failure to bring down its prices has made living conditions difficult for Tanzanians.

Official records show that inflation rate around 20 per cent and the situation is likely to remain the same for many months despite efforts by the Central Bank to go back to single digit through tightening of money supply in the economy and applying other monetary policy strategies.

Higher oil prices have pushed up food prices due to the cost of transportation of crops such as maize, rice, beans and many others from villages to markets in urban centers. The cost of electricity rises continuously because TANESCO is increasingly using diesel for power generation and the burden passed to consumers at their homes, hotels or manufacturing units.

The government on its part should work out strategies to improve facilities at the Dar es Salaam port to reduce charges for offloading or penalties where there are delays. According to EWURA, limited discharging capacity at the port of Dar es Salaam has also pushed up costs for offloading as well as demurrage charges due to delays.

As earlier planned, a bigger facility for discharging oil should be built as soon as possible under the public private partnership (PPP) system. EWURA must also step up control and monitoring system to avoid cases of fraud at the port.


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