Higher costs of crude and petroleum refined products in the international market has led to rise in maximum retail prices of both petrol as well as diesel in Tanzania. The weak local currency too has added fuel to fire, expecting to put further northward pressure on inflation.
In February the fuel prices rose to 5.5 percent compared to 5.2 percent in the same month in 2016.
Fuel prices play a pivotal role in maintaining the inflation rate in Tanzania.
Effectively implemented from March 1, the monthly cap prices of fuel prices are expected to be revised again this month.
According to EWURA, the price rise is the result of hike of oil prices in the world market, continued depreciation of the local currency and rise in bulk procurement system premiums too.
The Tanzania’s energy regulator raised the petrol price in Dar es Salaam by 102 shillings per litre and the new price stands at 2,060 shillings. Similarly 51 shillings have been increased in diesel in the commercial capital to 1,913 shillings.
However, the kerosene prices have not been revised simultaneously. It is still at 1,852 shillings per litlre.
The gross domestic product (GDP) of the country is about $43.8 billion and purchasing power parity (PPP) is $86.4. The country is one of the poorest in the world.
The United Nations Development Program said recently the national economy has benefited just the few in the country and majority of the people are left out.
The Global Hunger Index of 2013 was worse for Tanzania compared to all the other East African Countries except Burundi.