Relief for motorists as fuel prices drop

TANZANIA: MOTORISTS will breathe a sigh of relief of relief as fuel prices declined this month. The Energy and Water Utilities Regulatory Authority (EWURA) announced on Wednesday that the retail prices of petrol and diesel in Dar es Salaam dropped by 33/- and 49/- per litre respectively.

The new petrol price in Dar es Salaam is 3,051/- per litre down from 3,084/-in the previous month while diesel will be sold at 3,029/- per litre from 3,078/- of January.

EWURA attributed the decrease in prices of petroleum products this month to mainly a fall in the world oil prices by an average of 10.66 per cent for petrol and 7.13 per cent for diesel.

However, analysts are worried that the change in price is too little to lead to a significant impact on the economy. The Saint Augustine University of Tanzania (SAUT), Economics lecturer, Dr Isaac Safari, said the end users would not feel the price drop because there are several variables in the costs of production.

“The projection is that transport costs will not shift either way,” Dr Safari said. “This will have a minimal impact on producers and transporters, but for most consumers, the situation may remain the same.” Mzumbe University, Economics Lecturer Dr Romanus Dimoso said despite fuel being the main factor of production, the goods and services price decline depends on a number of parameters.

“When oil prices decrease, it doesn’t necessarily mean that other goods will suddenly drop in price. “No, not automatically. The decline will also depend on other factors such as electricity, storage, wages and raw materials.” The economist suggested that the country should invest in other sources of energy for transport due to fuel price fluctuation driven by ongoing geopolitical situations in the world. He proposed to invest in natural gas, and electricity.

An economist-cuminvestment banker, Dr Hildebrand Shayo said any fuel price decrease is good news and changes in other sectors may come in the future. A Dar es Salaam motorcyclist, Mr James Sebastian, said fuel prices decline was good news to them since it will increase the amount of litres purchased.

Despite the drop, Kyerwa in Kagera has the highest price of petrol at 3,288/- per litre. Similarly, the highest diesel price is in Nyasa, Mbambabay, Ruvuma, where a litre of diesel goes at 3,477/-.

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