Tanzania raises petrol prices on high import costs

DAR ES SALAAM: Tanzania's energy regulator on Sunday hiked the prices of gasoline, diesel and kerosene in its latest price review, due to high fuel import costs and a weaker local currency.

The Energy and Water Utilities Regulatory Authority (EWURA) raised the price of petrol 3.57 percent and increased the price of diesel 2.38 percent. Kerosene prices were also raised 1.77 percent in the routine price caps with effect from Monday.

EWURA also cited a slight weakening of the shilling against the dollar over the past two weeks.

"The price increases have been caused by a rise in the petroleum products prices in the world market," EWURA said in a statement.

"The Tanzanian shilling has depreciated compared to the US dollar - the currency in which purchases of products in the international oil market are made."

The regulator said the shilling depreciated by 0.55 percent compared to the last fuel pricing round two weeks ago.

After the adjustments, retail prices in the commercial capital Dar es Salaam for a litre of petrol will go for 2,102 shillings ($1.272), a litre of diesel will sell at 1,999 shillings, while kerosene will sell at 1,967 shillings per litre.

The energy regulator said it would lift a three-month suspension slapped in August on BP Tanzania, an oil trading joint venture owned by the government and a subsidiary of commodity trader Trafigura, for breaching compliance orders.

The fuel company apologised earlier this week for withholding fuel supplies last month and failing to comply with regulations.

Tanzania introduced a new formula in August for calculating fuel cap prices in line with a government pledge in its 2011/12 budget in June to cut prices to tackle the rising cost of living.

Previous mandatory price cuts in August caused a serious fuel shortage in east Africa's second-biggest economy, with some oil retailers rejecting the new method of calculating pump prices.

Copyright Reuters, 2011