Fuel pump prices drop 9 per cent starting on Tuesday, thanks to the reduction of fees charged by various government agencies and the indicative price calculation conducted by the Energy and Water Utilities Regulatory Authority (EWURA). However, oil marketing companies have rejected the new prices, saying they will incur losses. EWURA Director General, Mr Harun Masebu and the Board Chairman, Mr Simon Sayore told a news conference here on Monday that all oil marketing companies must respect the new indicative prices, effective today and that failure to do so will attract penalty.
"The new prices will be applicable effective tomorrow, (August 3, 2011) and everyone must take note of the changes. We will not accept any excuses to justify hiking of prices," said Mr Masebu when asked if it was practicable to put into effect the new prices, starting today."When prices increase, pump prices immediately shoot up, but when there is a reduction, traders come up with stories of "existing old stocks. We will not entertain any excuses," Mr Masebu said.
He said there has been over 51 per cent slash of various agency charges announced by Minister for Finance, Mustafa Mkulo. "As regulators, there isn't much to do to address the increasing world market prices for petroleum products. The shilling is also depreciating against foreign currencies," Mr Masebu said. Last June, Mr Mkulo announced sweeping changes in taxes charged on fuel products, including kerosene while dropping excise duty on diesel which has had a significant impact.
Pump prices had also been high due to numerous charges paid to government agencies including Surface and Marine Transport Regulatory Authority, Tanzania Ports Authority, Tanzania Bureau of Standards and Weights and Measures Agency and Tanzania Revenue Authority. The Ewura Board Chairman, Mr Sayore said since 2009 when the authority started publishing indicative prices, there has been a reduction of about 40 per cent."If we did not have EWURA, consumers would be paying 40 per cent more of the current prices," he said.
According to indicative prices released yesterday, a litre of petrol in Dar es Salaam will cost 2,004/-, diesel 1,911/- and kerosene at 1,905/-. That represents the lowest prices while the highest pump prices will be paid by consumers in Kagera and Kigoma regions. They will buy a litre of petrol at 2,235/-, diesel at 2,142/- and kerosene at 2,136/- .Meanwhile, as the industry watchdog announced new prices on Monday, the Tanzania Association of Oil Marketing Companies (TAOMAC) said it would "be unable to sell" petroleum products at the new prices.
The association Chairman, Mr Naidoo Seelan, told the 'Daily News' in a telephone interview on Monday that the indicative and cap prices set by EWURA were below the costs of the products.
"EWURA should revert to the old templates that have been in place since 2009, otherwise we would not be able to heed their order. It should come up with a template that makes sense," he stressed.
Asked on whether the term "unable to serve" should be interpreted as boycott, he said; "No, it is not a boycott, what we are saying is that If we will sell our products at prices set by EWURA, we will be making losses."According to Mr Seelan, the new template by the energy and water utilities regulator shows artificial rather than actual costs.
He complained that a good number of proposals forwarded to EWURA by stakeholders in the industry during the consultation period, were not taken on board.
Mr Seelan noted that even with the old template in place pump prices never reached the cap prices.
A random survey conducted in Dar es Salaam yesterday found out that a litre of petrol was selling at between 2,040/- and 2,060/- while diesel was fetching 2,060/- and 2,090/- per litre.
A litre of kerosene was sold at between 1,940/- and 2,070/- .
EWURA, oil marketing companies and other stakeholders have for the past one month, been engaged in consultations to review fuel prices in the local market.
This follows an announcement by Finance Minister, Mr Mustafa Mkulo, when presenting budget estimates for 2011/12 in the National Assembly in June, this year, that the government would review various taxes and levies imposed on fuel in a bid to reduce prices of the commodity.
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