Stakeholders in the Tanzania Energy and Water Utilities Regulatory Authority (EWURA) met yesterday to discuss the recent trend of unpredictable retail prices for petroleum within the country.
According to the Director General of the EWURA, Haruna Masebu, the EWURA has not been satisfied with this recent trend and is, therefore, asking its stakeholders to present new written proposals to the Authority on new petroleum price templates within a week.
This request comes as a result of the decision by some petroleum dealers to increase their fuel prices while world fuel prices are steadily on the decline.
The EWURA as indicated that these fuel dealers were issued several warnings prior to reaching this decision, but they had not responded effectively and so additional measures became necessary.
“According to the law,” said Mr. Masebu, “[the] EWURA can intervene and put the prices in [such] a manner that both the dealers and consumers all feel the value of their money.”
These same policies and legal frameworks that have been put in place to govern the price of petroleum products also mandate that the EWURA intervene and adapt the retail prices of petroleum whenever and wherever it becomes appropriate.
While speaking at the recent stakeholders’ meeting, the Energy and Minerals Minister, William Ngeleja, said that the government of Tanzania was obligated to protect its citizens as consumers in the petroleum industry.
“It is expected that an efficient petroleum products pricing system must ensure that the customer pays the true and fair cost of the products [and] also includes the modest returns to those who invest in petroleum business,” said Minister Ngeleja.
Therefore, according to a report by the Daily News, the EWURA has said that the formula for petroleum pricing must include fundamentals such as Cost Insurance Freight (CIF), free on board costs (FOB), government taxes, demurrage charges and local costs payable to other institutions.
In addition to the development of these services, during her presentation, the director of legal services for the EWURA, Ms. Muna Mahanyu, said that another goal of this new formula for pricing was to stimulate and increase competition among oil firms in the country.
According to Ms. Mahanyu, this competition would lead to cost savings in service levels, the improvement of the quality and standard of facilities as well as of the available products, the location of these facilities, the trading volumes and innovation within the sector.
According to Minister Ngeleja, the Tanzania Petroleum Development Corporation (TPDC) will begin to bring petroleum products into the country early next year, at the same time as other companies begin to import large portions of petroleum.