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Kerosene prices skyrocket
2008-05-09 09:29:49
By Lydia Shekighenda
Skyrocketing kerosene prices, which are now amazingly almost at level with those of petrol and diesel, have placed the country on the verge of a domestic energy crisis, The Guardian can report today.
A week-long thorough survey carried out in Dar es Salaam—the country`s key port and commercial capital—has revealed that the price for the crucial source of energy for the majority has shot dramatically from 950/- in March to 1,600/- per litre this week.
The trend is so consistent, although excise duty imposed on illuminating kerosene during last budget rose marginally from 54/- to 56/- per litre.
The possibility of there being illegal cross-border re-exports is also technically ruled out because prices over there are very low.
Both the government and oil dealers in the city`s three municipalities of Kinondoni, Ilala and Temeke, have admitted in separate interviews that the country is experiencing an acute shortage of kerosene.
In same vein, environmentalists describe the situation as too pathetic.
They fear further depletion of already degraded forests, as five million plus people in Dar es Salaam alone will definitely substitute kerosene for charcoal.
The price of the crucial domestic source of energy at different markets until this week stood at around 1,600/- per liter in retail markets, while the price in the wholesale markets was 1300/- per litre.
Data gathered from the survey also suggested that the price for the commodity doubled over the last twelve months, from approximately 800/- per litre mid last year to around 1,600/- this week.
A dramatic price increase was recorded over the last two months, with statistics from the survey showing that in early March this year the price stood at around only 1000/- to 1200/- per litre in retail markets and 950/- in wholesale markets.
Apart from sustained increase in price, some filling stations in Dar es Salaam do not have even a single drop of kerosene for about a month now, and, when interviewed, some oil dealers did not give reason why.
``We don`t know the reason behind the shortage of kerosene. For a month now we don`t have kerosene,`` said one Gapco attendant, who preferred anonymity.
He described the situation as terrible that needed an immediate solution.
In some suburbs, customers have been walking long distances looking for the commodity in vain. One of them, Kinondoni-Hananasifu resident Evelyn Mwaipopo was particularly concerned with the increase over the last few weeks, starting around March.
``I don`t know the reason for the increased price of kerosene. It has been rising every month. I don’t know why the government is not taking any action,`` she said.
Evelyn, who spoke to The Guardian at the city center`s Gapco filling station in Ilala municipality, was of the view that, as alternative source of energy primarily to charcoal especially in towns, kerosene had become so expensive and in most cases, unaffordable.
Jumanne Hamis, a retailer at Kawe area in Kinondoni municipality said that the price of kerosene at whole sale markets had gone up, forcing them to increase the price in order to get profit.
``Some retailers have opted not to sell kerosene because the price is high and people are complaining,`` he said.
Justifying, he said the commodity was being bought at 900/- per litre just two months ago, but now the wholesale price had shot up to 1300/- per litre, forcing them to hike the retail price so as to keep the business going.
A Dar es Salaam-based environmental journalist said the increase of kerosene price would obviously have negative impact on the environment, as many people especially in big cities and towns, would opt for charcoal as alternative source of energy.
``This is a lesson to us. I think there is a need to look for other alternative source of energy, which might be cheaper than petroleum related products,`` he said.
Energy and Water Utilities Regulatory Authority (Ewura) director general Haruna Masebu attributed the trend of fuel price in the country to the rise of price in the international market.
``The world market affects the price in the country. When the price goes up at the international market, it automatically rises and affects the local market,`` explained the DG in an interview.
Quite unfortunately, the energy and water utilities watchdog chief said, the fact that Tanzania is a net importer of petroleum products, it can hardly nothing to redress the situation.
``Measures which need to be resorted to by poor country like ours so as to protect the economy and customers include resorting to efficient procurement of petroleum products in short- term and embarking on gradual reduction of imported petroleum,`` he said.
He said Tanzania might embark on usage of natural gas to propel motor vehicles and substitution of heavy fuel with gas to generate electricity in the medium as well as long term.
However, Masebu said that Ewura was currently carrying out a study to find out if there was another reason for the increase of price of kerosene apart from the increase of price at the international market.
Energy and Minerals minister William Ngeleja acknowledged the negative trend of kerosene prices.
``Such hike in price is a huge burden to both the country and individual customers. This has not been recorded in this country in recent years,`` he said.
He said to a large extent, the prices of petroleum products, including kerosene had shot up reflected world market prices as well as fluctuations in the local currency.
Ngeleja said it was proper for the country’s petroleum business to remain liberalized and the market forces left to determine the final prices. However, he said deliberate moves should be adopted to safeguard interests of consumers.
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