A majority of motorists and low-income households have to pay slightly more for fuel after the Zanzibar Utilities Regulatory Authority (ZURA) has increased prices of petroleum products that will no doubt inflict more financial pain on them.
According to the new
prices petrol will now cost Sh2,327 per litre, a slight increase from the
Sh2,272 that consumers have been paying over the past month.
The regulatory body
has also hiked the diesel price and kerosene to Sh2,222 and Sh1,608 from
Sh2.182 and Sh1,546 past month respectively.
ZURA’s move intended
to increase government revenue has raised concerns over the ballooning cost of
living even as the economy struggles to shake off the effects of the Covid-19
pandemic.
For instance, for a
litre of petrol, consumers will pay an additional Sh55 from the past month's
price, meaning that consumers will have to pay Sh1,100 for 20 liters of petrol.
“The problem is that
the price of crude oil has been rising, affecting local prices. We cannot do
anything about that because we do not control production,” said an official
from ZURA.
He said the exchange
rate factor also plays a big role in determining the pump price changes, adding
in the case of Zanzibar the increase has always been fueled by the fluctuation of
the shilling against the US dollar.
He attributed this
particular increase to the cost of imported refined products in the
international market.
At the moment, the
government says it has no control over the prices since they are dictated by
the international market.
Commenting on the
price changes, industry players said they can hurt Zanzibar's economy by
causing inflation.
“Every time fuel
prices go up, there is a negative ripple effect on various sectors of the
economy, oftentimes to the detriment of the consumer,” said Kombo Omar an
economist.
However, he said as
long as Zanzibar and other countries in the region continue to rely on imported
refined petroleum products, they will have to contend with such changes in
prices.
“Until a cheaper means
of transport is found, the cost of transporting fuel from the port of Dar es
Salaam will continue to influence the cost of pump prices,” he said.
Rashid Issa, owner of
a public passenger truck said the increase in pump prices only complicates the
already dire economic situation.
“The increase in fuel
prices will increase the cost of doing business at a time when the Covid-19
pandemic has drained businesses,” he said.
Economists have warned
that oil prices may rise sharply in the near future due to the ongoing coronavirus
epidemic