Pump price shoot up

 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