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Tanzania grapples with fuel, dollar crisis

Tanzania is experiencing a fuel crisis after the Energy and Water Utilities Regulatory Authority (Ewura) increased the cost of petrol, diesel and kerosene.

The new prices went into effect on August 2, 2023 at 6:01pm.

According to EWURA’s Director General Dr James Mwainyekule, the price increase was occasioned by the challenges in the availability of American dollars and changes in the fuel levy, prices of petroleum products in the world market and premiums in the importation of petroleum products.

In the Ministry’s press statement, they released the new prices for urban areas and directed retailers to sell fuel at the new prices and any contrary sales would see the seller face the consequences.

According to the East African, the price of diesel increased from t Tsh2, 544 ($1.02) a litre to Tsh2, 935 ($1.18) a litre, while Kerosene increased slightly from Tsh2, 829 ($1.14) to Tsh2, 668 ($1.07) a litre. Petrol now retails at Tsh 3, 199 up from Tsh 2,736.

In photos in Nairobi News’ possession, while the new prices were announced for urban areas, in rural Tanzania, several petrol stations were filled to capacity with motorists lining up for fuel. This came after the government claimed there was no fuel shortage in the country but this was not the situation outside Dar-es-Salaam.

The new fuel prices and the lack of American dollars within Tanzanian borders comes almost five months since President Samia Suluhu appeared to mock Kenya over the same issues.

In March 2023, while addressing a gathering celebrating International Women’s Day, the Tanzanian Head of State appeared to mock Kenya – but without mentioning its name- claiming the country had no forex reserves to last a week and the was begging Tanzania for dollars to import petroleum products.

“Let no one lie to you. We are at a better place compared to our neighbors. Their dollar reserves cannot last a week. Our reserves can push us for four months. They are here begging us for guarantees so that they can buy fuel,” said President Suluhu.

Her comments were made after Tanzanian publication, The Citizen, published a report that commercial banks in Kenya had run out of dollars and were borrowing from Tanzania.

President Suluhu said she declined the requests and this prompted Kenya’s Treasury Cabinet Secretary Njuguna Ndungu to direct banks to ration the dollars in circulation within Kenya.

Due to the dollar shortage, the Kenyan government also increased the price of fuel to historic highs, causing uproar. Since President William Ruto assumed office, fuel has risen by over Sh 50 a litre.

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