Expert raises concern over fuel prices

The government has been advised to consider arranging concessionary agreements with international fuel suppliers to cushion the local economy from adverse effects of price fluctuation.

The Dhow Financial Managing Director, Prof Mohamed Warsamem, has raised the concern while commenting on fluctuation of fuel prices in the world market which is constantly fuelling inflation.

"For example, special arrangements may be made with the Organisation of the Petroleum Exporting Countries (OPEC) to ensure that the country is supplied with fuel at certain fixed prices particularly when world market prices go up," he said.     

Prof Warsame said the move could help the country control inflation and other costs of doing business.

According to the Energy and Water Utilities Regulatory Authority (EWURA) retail and wholesale prices for petrol and diesel products increased slightly by 6/- per litre, equivalent of 0.26 per cent and 37/-, a 1.82 per cent high in the local market compared with the last publications.

Similarly, wholesale prices made a slight change to 5.97/- per litre for petrol, equivalent to 0.28 per cent increase, 37.57/- or 1.91 per cent for diesel while price for kerosene remained unchanged.

Prices have been stable because of the stability of the shilling against the US dollar as a result of the Bank of Tanzania (BoT) tight liquidity stance. The local currency traded at an average between 1,580/- and 1,600/- per US dollar.

The lowest cap prices have been recorded in Dar es Salaam 2,189/- for petrol, 2,081/- for diesel and 2,068/- for kerosene per litre. The highest cap prices have been recorded in Karagwe for petrol at 2,420/-, diesel at 2,312/- and kerosene at 2,299/-.

Prof Warsame added that improved infrastructure for transporting fuel from the point of origin to various parts of the country could lead to increased efficiency in other sectors of the economy as well as reduce costs of doing business.

He also urged the government to consider reducing tax on fuel products, a factor that would have multiplier effect on other items.
Source: The Daily News,www.dailynews.co.tz, reported by Sebastian Mrindoko
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