Battle of wills on oil prices

BAK · 2008-11-22T17:38:07+00:00

Battle of wills on oil prices 2008-11-22 11:23:38 By Gadiosa Lamtey The government has given oil companies until December 10 this year to reduce prices of oil to levels that reflect current global petroleum prices. Energy and Mineral William Ngeleja issued the ultimatum yesterday in Dar es Salaam when officially opening the Tanzania Association of Oil Market (Taomac) offices. He said oil firms had been given sufficient time to set prices that would reflect the world market situation before the Energy and Water Utilities Regulatory Authority (EWURA) called a stakeholders conference next month. Prices of petroleum products have nosedived in the global market, but local pump rates have either remained static or shot up. Diesel, for instance, has dropped from USD 1,215 per metric ton to about USD 566 per metric ton. In spite of the sharp decline, Tanzanian consumers have not seen a corresponding drop. Ngeleja said although government policy and legislation allowed for freely competitive and liberalized downstream fair prices to consumers, the government would not sit back and watch oil companies milked consumers for no good reason. ``Petroleum product consumers are keenly following up the drop in world oil prices and are hoping that the drop will be reflected in their pockets through lower costs,`` the minister said. He said the current global economic crisis had brought not only a lot of uncertainties in the trading sector but also fears of total collapse of business. ``Even big multinational financial institutions, including giant US car manufacturers, are all queuing up for US government bailout financing,`` he said. He said what happened in the US could also happen in Tanzania. ``The government will not let oil companies deliberately create artificial hardships to the people by hiking prices at a time when global rates are declining,`` he said. Responding, Taomac chairman Krishnaprasad Rai said it was virtually impossible for oil dealers to comply with the ultimatum. He said pump prices differed from one exporter to another, depending on time of arrival of a particular consignment. ``It is impossible for prices to be similar across the board because they are set depending on where the dealer got the oil from,`` he said. He urged all stakeholders to take part in the Ewura consultative meeting slated for next month so as to give their views on this important topic. A survey carried out in Dar es Salaam and several upcountry regions, including Arusha Morogoro, Mwanza, Kilimanjaro and Dodoma, shows that there has been no substantial change in the retail prices of petroleum products even after prices in the world market have gone down. A few dealers at some of the filling stations have adjusted the prices slightly by lowering them by between 60/- and 140/- per litre but the rest have stuck to the higher ones. At Oilcom filling stations, diesel was selling at 1,660/- per litre, petrol at 1,578/- and kerosene at 1,300/-, Engen fuel stations were selling diesel at 1,758/- per litre and petrol at 1,578/- while BP sold diesel at 1830/- and petrol at 1650/-. While pump prices in Dar es Salaam have almost remained static, they have slightly gone down upcountry, although the oil is sourced all the way from Dar es Salaam. In Arusha for instance, most filling stations sell petrol at between 1430/- and 1440/- and diesel ranges between 1470/- and 1540/-. In Dodoma petrol and diesel is sold at 1500/- in most filling stations, while in Moshi diesel ranges from 1480/- to 1730/- while petrol ranges from in between 1480/-and 1560/-as of yesterday. Husein Abdallah, a Dar es Salaam businessman, said yesterday that oil dealers in Dar es Salaam were hiking prices out of greed. ``It is unconceivable to note that upcountry oil prices are lower compared with Dar es Salaam in spite of the fact that upcountry oil dealers get their stock from Dar es Salaam and pay extra transport charges because of the distance,`` he said. Early this year, before global oil prices had galloped, retail prices were just slightly over 1,000/- per litre for petrol and less than 1,000/- for diesel. Ewura Director General Haruna Masebu said recently that oil dealers had started lowering pump prices, although not up to a level that his authority would be comfortable with. SOURCE: Guardian

Thread starter BAK
Start date Nov 22, 2008

BAK

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Nov 22, 2008

Ngongo

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