Tanzania: Govt Dishes Out 100bn/ - in Fuel Subsidy

Outlines longterm measures, MPs congratulate Samia

THE government has dished out a total of 100bn/- as an emer- gency measure to subsdise and cushion the skyrocketing fuel prices with effect from next month.

Announcing the measure in the National Assembly on Tuesday, Minister for Energy January Makamba said President Samia Suluhu Hassan having convened a meeting with ministers directed for instituting the measure to bring relief to Tanzanians.

Elaborating, the minister noted that the funds released in fuel relief package will not affect development projects.

He said the Head of State or- dered for tightening government expenditures for the remaining days of the ending financial year (2021/2022) before the kick- off of the new financial year, so that the money saved could help Tanzanians in securing the relief.

The minister said the relief in fuel prices will be noticed from 1st June, 2022 simply because oil dealers had already incurred import costs for the fuel stock that is currently in the market.

"The prices issued by the Energy and Water Utilities Regulatory Authority (EWURA) in May (May cap Prices) included the importation costs that oil dealers already incurred," explained the minister.

According to the minister, the government is in the final process to acquire loans from the World Bank (WB) and the International Monetary Fund (IMF) that will be used in the next financial year to subsidize fuel and other commodities that directly touch people's lives.

However, the minister could neither divulge details of the loans nor the amount. Mr Makamba also outlined other long term measures aimed at bringing relief which, among others, included inviting capable private individuals and companies to import fuel.

According to the minister the min- istry has completed carrying out assessment on companies that expressed interest to import fuel.

The objective of the measure is to have another side that can challenge Tanzania Petroleum Bulk Procurement Agency (PBPA) by importing fuel at less costly prices and with the required quality, stepping up the country's security of supply.

Another long term measure, according to the minister, is to establish what he termed it as Fuel Price Stabilisation Fund, adding that the govern- ment has already prepared a special arrangement for establishing it.

"The plan for establishing this fund is in the final stages of preparations.

Once we are through, we will take it to the Cabinet meeting," Mr Makamba said amid applause from legislators.

Another long term measure will include establishing the National Strategic Petroleum Reserve.

The minister said the government is finalising regulations for the plan that will involve starting a Petroleum Hub. "In order for the country to establish a Petroleum Hub we are finalising talks for the agreement to build storage tanks so that we may sell fuel to the neighbouring countries," he explained, adding that the plan will be completed within a three-year period.

Also in the list of long term measures included introducing what the minister termed as Single Receiving Terminal (SRT) through Tanzania International Petroleum Reserve Lim- ited (TIPER) storage tanks.

The minister said the plan (SRT) will help to reduce fuel landed costs most of which are contributed by shipment and demurrage costs.

Enabling Tanzania Petroleum De- velopment Corporation (TPDC) to im- port fuel is another measure outlined by the minister.

According to Minister Makamba, the Corporation performed the func- tion twenty (20) years ago.

He said another measure improving performance and professionalism of government institutions engaging in oil business such as EWURA and PBPA.

Mr Makamba having issued the government statement on the measures, some MPs including Prof Kitila Mkumbo (CCM- Ubungo) and Festo Sanga (CCM-Makete) hailed President Samia Suluhu Hassan for listening to the public concern.

Last Thursday, Members of Parliament asked the government to insti- tute adhoc measures to provide relief to the surging fuel prices.

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