ECONOMISTS have described a decline in fuel prices as a big relief to the country's production and transport costs which would further impact the economy positively.
The recent fuel prices drop by between 9/- and 67/- per a litre of petrol and diesel respec- tively has been prompted by initiatives under- taken by the government to reform various fuel levies aiming to relieve Tanzanians from digging deeper into their pockets.
In an exclusive interview with the Daily News on Wednesday, an Economist and Researcher at Massa Institute of Social Sciences Research, Dr Muhajir Kachwamba observed that fuel is considered as a key component in production and transportation of goods.
Dr Kachwamba pointed out that various machines and ve- hicles for transportation rely on fuel to operate, noting that when there is a drop in the prices, the production and cost of operation offers a relief to its consumers.
"The decline may be consid- ered as too small in figures, but in economic perspective it bears a huge impact, thereby creating a great relief in many aspects.
"Cost of production will go down, and the same applies to transport cost, thus impacting on the lives of the final consumers," said Dr Kachwamba.
An Independent Economist, Mr Leornard Joseph was of the view that the current move un-dertaken by the Energy and Water Utilities Regulatory Authority (Ewura) to reduce oil prices in the country will help to maintain inflation to a single digit.
Mr Joseph noted that it implied that the cost of goods will either go down or remain con- stant, hence maintaining the cur- rent price stability.
"People will be in a better position to save some money and direct it to their disposable incomes...any penny you save is better than nothing," he stated.
On the other hand, Manage- ment Consultant and Economics Researcher, Mr Joshua Mwakalikamo underscored that the transportation sector will directly and immediately benefit from the price change of fuels which will further attract or restore business in the sector as well.
He, however, noted that fuel prices are so volatile, therefore opportunities emerged from the decrease may be temporary but will remain essential for stimu- lating businesses.
"Looking at the share of services in the Gross Domestic Product of Tanzania, transportation contributes about 8 percent, this implies that the effect of price decrease can be reflected in the economic growth as well.
"This is to say, transportation influences mobility of people, lower production and distribution cost and maximizes profits of firms which are accounted for economic growth," noted Mr Mwakalikamo.
He was of the view that the government should use the op- portunity to increase storage of fuel for use when global fuel supply goes down, saying this will help to serve the country when there is a shortage in oil supply from global oil producers.
Fuel price decrease has also thrilled motorists as they ex- pressed their relief.
One of the motorists, Mr Damas Ngowi revealed that the slight drop in oil prices was a relief, saying that in December he could not get four litres of petrol with 10,000/-, but since an- nouncement of the new prices he manages to get some four litres from the same amount.
Another motorist, Faith Minja, said the previous prices forced her to park her car due to high costs of driving a car.