ONE of the country’s leading oil marketing companies, Oryx Energies Tanzania Limited, has applauded the government for the disbursement of a 100bn/- monthly subsidy for stabilizing prices of petroleum products in the local market.
Oryx Energies Managing Director, Mr Kalpesh Mehta, showered the praises in Dar es Salaam on tuesday during an interview with journalists on the sidelines of the Tanzania Energy Congress that started yesterday at the Julius Nyerere International Convention Centre (JNICC).
Mr Mehta said the monthly subsidy has played a critical role in stabilizing prices of the precious liquid in the local market and helps to control inflation.
“Oil prices and freight costs have increased worldwide due to the effects of the Covid-19 pandemic and the ongoing conflict between Russia and Ukraine.Tanzania is not an island and thus it is also being affected by fuel prices skyrocketing in the world market,” Mr Mehta stated.
The MD was of the view that the prices of petroleum products would have been unbearable to the common people if the government had not dished the monthly subsidy.
“An increase in oil prices leads to an increase of prices for other products due to higher transportation costs, but the subsidy has helped maintain the pump prices of fuel in Tanzania compared to other countries,” he stated.
Unlike other countries in the region, Tanzanians have been enjoying somewhat relief from soaring prices of fuel, thanks to a monthly subsidy of 100bn/- which was announced by President Samia Suluhu Hassan in May this year and became effective in June.
The Head of State said during the announcement of the subsidy that the government was concerned with the soaring price of fuel and inflation that have been caused by several factors, including the ongoing conflict between Russia and Ukraine.
Meanwhile, Mr Mehta said his company commits 10 US million dollars (about 23bn/-) each year to the production of gas cylinders for Liquefied Petroleum Gas (LPG), which are sold at subsidized prices to final consumers.
He noted further that just like other petroleum products, the prices of LPG and freight costs have gone up and thus impacting negatively on the final prices of the energy to the people.
However, Mr Mehta said it was high time that people are educated on the importance of using clean energy such as LPG, so as to reduce the effects of climate change caused by use of energy sources that are harmful to the environment.
On the other hand, he said his company is still pondering on investing in Compressed Natural Gas (CNG) filling stations once the demand for energy guarantees economic returns on investments.
Mr Mehta was non-committal as to when the venture will take place but was quick to add that once CNG becomes economically viable then his company will use its existing network of petroleum filling stations to incorporate CGN stations.