Samia Wants Solutions for Fuel Price Hikes. But Solutions Already Abound

Fuel prices hit new highs in Tanzania last week with petrol selling at Sh3,148 and diesel at Sh3,258 per litre at the pump in Dar es Salaam, up from Sh2,86 and Sh2,692, respectively in April.
The Chanzo Reporter9 May 20222 min

Dar es Salaam. President Samia Suluhu Hassan on Monday directed senior officials within her administration to find immediate solutions to the ongoing crisis of the unprecedented hike in the price of fuel in Tanzania, finally breaking her silence surrounding the issue that has resulted in the rise in the cost of living in the country.

The meeting, which took place in the late hours of Monday, was participated by Prime Minister Kassim Majaliwa, Energy Minister January Makamba, Finance Minister Mwigulu Nchemba, the Commissioner-General of the Tanzania Revenue Authority (TRA) Alphayo Kidata and Permanent Secretaries for energy and finance.

The meeting, which took place at the State House in Dar es Salaam, came after only three days after Mr Majaliwa held a meeting with relevant authorities on May 5 that was aimed at exploring what the government can do to reduce the price of fuel in the country, with the premier urging for calmness among citizens.

Fuel prices hit new highs in Tanzania last week with petrol selling at Sh3,148 and diesel at Sh3,258 per litre at the pump in Dar es Salaam, up from Sh2,86 and Sh2,692, respectively in April.

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The government is associating the ongoing Ukrainian war with the rise in the price of fuel but lawmakers and other commenters have suggested that the government can take efforts to stabilize the price and save Tanzanians from misery.

Opposition ACT-Wazalendo party, for example, wants the government to remove the Sh 500 levy from each litter of fuel that is charged, a call that has earned support from many others who have commented on the issue so far.

The leader of the party Zitto Kabwe has also demanded the stopping of some of the government projects, including power and water projects so that the government can use the money to stabilize the price of fuel in the country.

The argument for the scrapping of some levies charged in every litre was also made by Ubungo MP (Chama cha Mapinduzi – CCM) Prof Kitila Mkumbo who on April 8, 2022, while contributing to the Prime Minister’s budget for the 2022/2023 financial year, suggested the scrapping of Sh400 as part of the levies for four months.

“Desperate times call for desperate measures,” Mkumbo, former university professor, said in his speech. “We are in an unprecedented time and thus the government is supposed to take unprecedented measures.”

During the same session, Mlalo MP (CCM) Rashid Shangazi urged the government to consider establishing a fuel stabilization fund, calling it “the only way” that the government can stabilize the price of fuel in the country.

If Tanzania takes that path, it will not be the only country to do so. On April 1, 2022, Kenyan lawmakers approved the appropriation of over Sh200 billion for the stabilisation of fuel prices in the wake of serious shortages in the country.

Writing for The Chanzo on February 23, 2022, a Dar es Salaam-based consultant Emmanuel Mwesiga said that such a fund would give the government the discretion of adjusting the fluctuation with monies in the kitty when the price is high and stop whenever the prices go low.

“The advantage to these funds is that the government does not need to waive or scrap all its taxes, charges, fees and levies at the expense of failing the agencies which operate on the collections of those charges,” he wrote then.

The Chanzo Reporter

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