Oil Prices Surge As Shilling Weakens

Vehicles owners will now pay more on every litre of petrol they purchase as the petroelum regulator raises prices for the products in response to a depreciating local currency and increasing global prices.

The Energy and Water Utilities Regulatory Authority (Ewura) says in a statement – published in newspapers today – that it is adjusting the retail price for a litre of petrol, diesel and kerosene upwards by 3.64 per cent, 7.47 and 8.9 per cent respectively.

“To a large extent, these changes have been caused by increase in petroleum products prices in the world market, BPS [Bulk Procurement System] tender premium charge and depreciation of the shilling against the dollar – the currency used for procurement of petroleum products,” the Ewura director general, Mr Felix Ngamlagosi says in a statement.

The increase in fuel prices comes hard on the heels of escalating prices of maize floor, rice and other cereals – a combination of which may have negative effects on efforts to contain inflation rate to low levels.

Food and non-alcoholic beverages account for a 38.5 per cent weighting in a basket of goods upon which inflation rate is measured (the consumer price index — CPI).

 On the other hand, housing, water, electricity, gas and other fuel have an 11.6 per cent weighting in the CPI while transport, which is closely linked to fuel occupies a 12.5 per cent weighting.

The government’s target is to achieve a 7.3 per cent real gross domestic product growth in 2016-2017 while inflation – which rose to 5 per cent in December 2016 from 4.8 per cent in November – is to remain within the single digit levels by the end of June this year.

Going by Ewura’s new figures, Dar es Salaam residents will now be required to pay additional Sh69, Sh129 and Sh151 to buy a litre of petrol, diesel and kerosene respectively. Specifically, the cap prices for the products now stand at Sh1,959, Sh1,861 and Sh1,852 for petrol, diesel and kerosene respectively.

Residents of Uvinza in Kigoma will pay the highest prices at Sh2,202, Sh2,104 and Sh2,095 for petrol, diesel and kerosene respectively.

Source: The Citizen

Leave a Reply

Your email address will not be published. Required fields are marked *