Dar es Salaam – As public outcry mounts over the historic surge in fuel prices, the opposition party CHADEMA has presented a detailed economic analysis challenging the government’s narrative that the crisis is solely an external shock. The centre-right party argues that excessive domestic taxation is exacerbating the pain for ordinary citizens.
In a national address on April 6, 2026, John Heche, CHADEMA’s deputy chairperson for Tanzania Mainland, outlined a comprehensive four-point emergency plan to address what he described as a cost-of-living crisis rather than just an energy issue.
The plan calls for immediate tax relief, temporary subsidies, emergency planning to prevent food shortages, and price controls during the three-month period when strategic reserves are being utilised.
“Today I am not speaking to you about the price of fuel,” Mr Heche said during a press conference. “I am speaking to you about the lives of people. I am speaking to you about daily transport fares. I am speaking about flour, rice, fish, vegetables, milk, eggs and essential commodities on the table of every citizen.”
Tax burden
The opposition’s analysis revealed that for every Sh100 spent on fuel, approximately Sh31 goes to government taxes, levies, and duties. Heche detailed that whilst the Free on Board (FOB) cost and freight insurance total around Sh2,100 per litre, the final pump price is inflated by 18 different charges, including excise duty, fuel levy, and railway levy.
“The world can initiate a shock in fuel prices, but the government decides the extent to which citizens are hurt,” Mr Heche explained. “The government must solve the problem and ensure that the lives of citizens become affordable whilst services are available easily and affordably.”
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Heche broke down the tax structure in detail. For petrol, he identified approximately Sh400 in excise tax, Sh300 in exercise duty, Sh500 in fuel levy, Sh300 as the Oil Marketing Company margin, and Sh170 as the retail margin, with additional railway levies and other charges adding to the burden.
Heche pointed out a stark regional contradiction that undermines government claims about external factors.
Landlocked neighbours like Rwanda, Uganda, and Zambia, which import their fuel through the Dar es Salaam port and incur additional transport and storage costs, currently have lower pump prices than Tanzania due to lower domestic taxation.
Kenya, which has its own port, charges a 28 per cent tax rate compared to Tanzania’s 31 per cent. Rwanda, Uganda, and Zambia all apply 30 per cent or less, yet their citizens pay less at the pump despite higher logistics costs.
Proposed reforms
To provide immediate relief, CHADEMA has demanded that the government implement a temporary fuel relief window of 60 to 90 days. This would involve targeted subsidies to protect sensitive sectors like transport and agriculture, shielding citizens from the worst of the crisis.
Furthermore, the party called for the removal of the 18 taxes and levies currently applied to fuel. According to Heche, reducing the tax burden by just 10 per cent would lower the price of petrol by Sh382 per litre, providing significant relief to transport operators and preventing a cascading food crisis.
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“When fuel prices rise, transport fares rise,” he analysed. “When fares rise, food prices rise. When food rises, small businesses suffer. When businesses suffer, income falls. When income falls whilst prices rise, the citizen enters a trap of great suffering.”
Heche emphasised that this is not merely economic theory but a lived reality for millions of Tanzanians. The opposition leader explained that a 10 per cent tax reduction would translate to petrol costing Sh3,500 instead of Sh3,820 per litre, and diesel dropping from Sh3,806 to Sh3,100 per litre. Such reductions would directly benefit motorcycle taxi operators, bajaji drivers, and small traders who form the backbone of the informal economy.
The opposition also questioned the management of the country’s strategic reserves. Noting that the Ministry of Energy previously assured the public of a three-month fuel supply stored at the Kigamboni tanks—reserves built by President Julius Nyerere after the 1979 Uganda-Tanzania war—Heche asked why prices spiked before new, more expensive consignments arrived.
“If we have three months of fuel that was already in the country when this crisis began, how can that fuel suddenly become expensive before new fuel arrives?” he asked.
The opposition leader suggested that the government should have controlled prices for the three-month period whilst drawing down these strategic reserves, protecting citizens from the full brunt of global market volatility.
Govt measures
The government, however, maintains that the price hikes are an unavoidable consequence of the ongoing conflict between the United States, Israel, and Iran, which has severely disrupted global supply chains and caused crude oil prices to surge by 70 per cent in just two weeks.
READ MORE:Tanzania Convenes Emergency Fuel Sector Summit as Middle East War Rattles Global Oil Markets
The closure of the Strait of Hormuz, through which approximately 20 per cent of the world’s oil passes, has created a shortage of cargo vessels and raised insurance premiums, directly affecting import costs for nations like Tanzania.
In response to the crisis, Prime Minister Mwigulu Nchemba recently addressed Parliament, acknowledging the economic shock and outlining a strategy focused on strengthening mining revenues and tightening government expenditure.
Several Members of Parliament have echoed this sentiment, urging the government to lead by example by cutting non-essential spending, such as the use of expensive V8 vehicles for local travel.
The Ministry of Energy has also taken steps to prevent artificial shortages. Minister Deogratias Ndejembi previously convened a sectoral meeting and issued strict directives against fuel hoarding, warning that any depot found hiding fuel in speculation of further price rises would face severe consequences.
A joint task force has been formed to track fuel shipments in real-time to ensure they reach their intended destinations.
However, CHADEMA alleges that one company connected to powerful government figures has been given a monopoly on fuel importation, allowing it to control prices and exploit the crisis for private gain.
READ MORE:Tanzania Strengthens Preparedness as Middle East War Deepens Energy and Security Fears
Heche suggested that this monopoly arrangement is a key factor in the current price spike, separate from global market forces. The Chanzo could not independently verify this claim.
Economic impact
Heche emphasised that the fuel crisis is not merely an energy sector issue but a fundamental threat to the cost of living. He described what economists call “cost-push inflation shock”—when fuel prices rise, everything else follows. Transport costs increase, food prices rise, small businesses suffer, incomes fall, and citizens enter what he called “a trap of great suffering.”
The opposition leader identified specific groups bearing the heaviest burden: motorcycle taxi operators, bajaji drivers, small traders, farmers, fishermen, and low-income families. He noted that teachers and factory workers with fixed salaries face particular hardship, as their incomes do not rise with prices.
Despite these government assurances, industry leaders warn that the situation remains precarious. Raphael Mgaya, Executive Director of the Tanzania Association of Oil Marketing Companies (TAOMAC), has cautioned that if the Middle East war drags on, fuel prices could reach an unprecedented Sh4,700 per litre, pushing the economy to the brink.
Within two weeks of the conflict’s outbreak, crude oil prices surged by more than 70 per cent—a spike that has never occurred in such a short timeframe in the history of global oil markets.
Path forward
For CHADEMA, the solution lies in immediate domestic policy shifts rather than waiting for global markets to stabilise. The opposition party insists that whilst the global crisis is real, the government has the agency to mitigate its impact through tax relief and strategic management of reserves.
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“We will not accept the country being run by decisions that hurt citizens whilst a few benefit,” Heche warned. “We want justice, we want affordable living, and we want this to happen now.”
The opposition leader concluded by emphasising that this is not a matter of bad luck but of policy choices. He cited the Auditor General’s report documenting negligence, theft, and corruption, arguing that these failures have contributed to the current vulnerability.
