The month of Ramadan brought with it more than spiritual reflection. As the holy month began, the United States and Israel launched strikes against Iran, triggering a cascade of retaliatory actions that sent shockwaves through global energy markets.
Tehran’s response was swift and targeted: Iranian drones struck Qatar’s LNG production facilities, halting output from the world’s largest liquefied natural gas exporter, whilst missile debris ignited fires at Saudi Arabia’s Aramco oil refinery.
The closure of the Strait of Hormuz — through which approximately 20 per cent of the world’s oil supply ordinarily passes — completed a picture of acute global energy disruption. Oil prices surged, tanker insurance costs climbed, and supply chains buckled under the weight of geopolitical uncertainty.
For countries that depend almost entirely on imported petroleum, the pain was not abstract — it was felt at the fuel pump, in transport fares, and in the cost of everyday goods.
Tanzania was no exception to this pattern of contagion. This is not a crisis without precedent: Russia’s full-scale invasion of Ukraine in 2022 produced a near-identical shock, with soaring oil prices and disrupted supply chains delivering a brutal reminder that economies built on imported energy are perpetually hostage to events beyond their borders. The pattern is consistent, the lesson unchanged, and yet the structural vulnerability persists.
Prudent but insufficient
This week delivered two telling moments in Tanzania’s energy story. On March 3, 2026, President Samia Suluhu Hassan laid the foundation stone for a US$265 million oil receiving and storage tanks project at the Port of Dar es Salaam — a 15-tank complex with a combined capacity of 378,000 cubic metres, designed to double the port’s annual oil handling capacity and slash vessel waiting times from 22 days to seven.
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The very next day, the Minister for Energy, Deogratius Ndejembi, convened an emergency meeting with oil marketers and regulators to manage the domestic fallout from the Middle East conflict.
Both moves reflect sound governance instincts, and the government deserves credit for acting with urgency. Strategic reserves and improved storage infrastructure are necessary responses to supply disruptions.
But they address the symptom rather than the disease: building capacity to store more imported fuel is not the same as building the capacity to need less of it.
The deeper, more uncomfortable question remains unanswered: why does a country sitting atop 57 trillion cubic feet of proven natural gas reserves continue to spend billions of dollars importing refined petroleum for its transport sector? The answer is not geological. It is political.
A recurring wound
Three years ago, colleagues at the ACT Wazalendo Shadow Cabinet Research Office raised this question with some urgency, proposing a structured national transition to Compressed Natural Gas (CNG) for vehicles and machinery.
The proposal was specific and sequenced: begin with the government fleet to create anchor demand, convert GPSA depots into dual-purpose CNG and petroleum stations, then scale progressively to public buses and freight trucks.
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The government’s response was, at best, a crawl — a handful of new CNG stations have since opened, but nothing approaching a coherent national strategy.
Now, with the Middle East in flames and global oil prices climbing once more, the country finds itself in the same position it occupied in 2022: reactive, exposed, and paying a price that domestic resources could significantly reduce.
Tanzania’s petroleum import bill has hovered around US$2.5 billion annually in recent years — a vast haemorrhage of foreign exchange that flows out of the country with every tanker that docks at Dar es Salaam port. Every global flare-up becomes a domestic economic wound.
The gold price windfall that has buoyed government revenues in recent years offers little permanent comfort. When oil prices rise sharply, as they are doing now, the gains from commodity exports are rapidly eroded by the cost of energy imports. The structural imbalance is not a matter of bad luck; it is a matter of policy choice.
The CNG proposition
The case for a national CNG transition is neither idealistic nor untested. Countries with far smaller gas endowments than Tanzania have made the shift for straightforwardly economic reasons: Iran, Pakistan, Argentina, and Egypt have each converted millions of vehicles to CNG — not in pursuit of green credentials, but because domestic gas is cheaper than imported oil.
Argentina recently invested US$45 million in CNG buses as part of a deliberate energy strategy, whilst Egypt is in the process of converting tens of thousands of additional vehicles annually.
The savings available to Tanzania are substantial. Converting just 25 per cent of road transport to CNG could reduce the petroleum import bill by at least US$500 million per year — capital that would remain in the domestic economy, available for roads, agriculture, manufacturing, healthcare, and education.
The insulation from oil market volatility would be equally significant: when the next crisis strikes Ukraine, Iran, or wherever the world’s next flashpoint proves to be, the economic transmission mechanism into Tanzania’s cost of living would be materially weakened.
The anecdotal evidence from early CNG adopters in Tanzania is striking. Drivers who have made the switch report that a journey costing Sh100,000 in petrol can be completed for as little as Sh27,000 on CNG — a saving of nearly 70 per cent, consistent with the experience of CNG users in comparable markets.
For a country where transport costs constitute a significant share of household expenditure, particularly for lower-income families, this is not a marginal efficiency gain — it is transformative.
Beyond fuel substitution
A national CNG transition is not merely an energy policy intervention — it is the foundation of a broader gas economy. Greater domestic consumption of natural gas across transport, industry, and households would reduce foreign exchange outflows, strengthen domestic value chains, and create employment across the supply and distribution network.
It would also ease pressure on forests, given that reduced transport costs can diminish the economic incentive to rely on charcoal as a cheaper alternative to commercial energy.
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This domestic agenda connects directly to the long-stalled Lindi LNG project, which has too often been framed exclusively as an export venture. The project’s economic viability and strategic value are, in fact, best secured by anchoring it to a robust home market — one that generates consistent domestic demand for gas across CNG infrastructure, fertiliser plants, petrochemicals, and industrial processing.
Export revenues are more sustainable when they complement, rather than substitute for, domestic consumption.
The Lindi project has been delayed for years by a combination of commercial disagreements, financing challenges, and a failure of political will. Accelerating it — with a clear domestic distribution mandate alongside the export component — would transform Tanzania’s energy landscape in ways that no number of petroleum storage tanks can replicate.
The two ambitions, domestic CNG adoption and the Lindi LNG deal, are not in competition; they are mutually reinforcing.
The path forward
The transition to CNG requires a clear policy framework, not a wish list. The government should mandate that all new vehicles procured by any public agency be at minimum dual-fuel capable — able to run on both CNG and petroleum — with a firm timeline for full conversion of the existing government fleet.
This single measure would create sufficient anchor demand to attract private sector investment in CNG supply infrastructure without requiring public subsidy.
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All GPSA depots across the country should be equipped to dispense CNG alongside their existing petroleum products. This would create a ready-made national distribution network and provide the commercial certainty that private CNG tanker operators need to invest in supply logistics.
The Land Transport Regulatory Authority (LATRA) has the tools to accelerate the transition further by incorporating CNG capability into the licensing conditions for passenger buses and freight operators, with a phased implementation timeline that allows operators to plan and invest accordingly.
None of this will happen overnight, and none of it should be expected to. Energy transitions require coordination, sustained investment, and the kind of political will that outlasts electoral cycles.
But the cost of continued delay is not neutral — it is measured in billions of dollars of avoidable foreign exchange expenditure, in the vulnerability of Tanzanian households to crises they did not cause, and in the squandering of a natural endowment that most countries would consider a transformative national asset.
Sovereignty, not sentiment
The Ukraine war demonstrated, with brutal clarity, that energy dependence can cripple even relatively sophisticated economies within months. The current Middle East conflict is demonstrating it again, in real time, and Tanzania is watching from a position of entirely avoidable exposure.
The question is whether the political will exists to act on the country’s natural endowment before the next crisis arrives.
READ MORE: Why Tanzania’s Location Is Its Untapped Goldmine
Building petroleum storage tanks is the right short-term response to an immediate supply threat. It is not an energy strategy.
True energy security — the kind that endures across crises, protects households from price shocks, and keeps foreign exchange within the domestic economy — comes from developing and deploying what the country already possesses beneath its own soil.
The time for cautious incrementalism has passed. What is required now is the kind of decisive, sequenced, and sustained action that converts a geological advantage into an economic one.
That is not merely energy policy — that is economic sovereignty!
Zitto Ruyagwa Z. Kabwe is a Tanzanian politician and the former Party Leader of ACT Wazalendo. He served as a Member of Parliament and Shadow Finance Minister, and Chairperson of the Public Accounts Committee of the Tanzanian National Assembly (Bunge). He is available at zitto_kabwe@outlook.com. These are the writer’s own opinions and do not necessarily reflect the viewpoints of The Chanzo. Do you want to publish in this space? Contact our editors at editor@thechanzo.com for further enquiries.
