Monday, May 13, 2013

How kerosene price continues to haunt the budget of low income earners

THE price decrease on petroleum products which was announced by Energy and Water Utility Regulatory Authority (EWURA) on Wednesday this week, has become a bless for motor vehicles operators, but it has disheartened kerosene users in the country, the survey can establish. The survey reveals that, the price of kerosene which has remained constantly without being changed continues to haunt the majority poor people in rural areas who utilize the product for domestic use. The survey shows that, kerosene oil in the country has been sold at between Sh. 1,150 and Sh. 2,050 for the last three years since EWURA introduced monthly indicative price quotations for oil products in the country. Unlike in the past before the introduction of indicative price for kerosene, the product was sold almost half the price of petrol and diesel, but now it is surprising to note that, there is a slight difference in price quotations and sometimes kerosene price is sold higher than either of the two oil products. The prevailing situation according to the survey reveals that, the product has been affecting the budget of the low income earners majority of whom are rural dwellers in the country as the indicative prices by EWURA does not make an effective change on the product. Kerosene oil has become a common usable commodity as a main source of fuel for people in rural communities as the supply of electricity in these areas is very scanty and rather inadequate due to poor infrastructure.  Users of the product say that the product continues to be fetched at a higher price rate that is not easily affordable and is more aggravated by the indicative price levels which keep on fluctuating month after month.  Statistics made available by EWURA indicates that, the price of kerosene oil has increased from Sh. 1,125 per litre sold in early April 2011 to currently Sh. 2,023 per litre. This is a trend of retail business in Dar es Salaam market, but it is slightly higher in upcountry markets. Statistics made available by National Power Utility firm (TANESCO) shows that electricity supply in rural Tanzania communities covers only 2 percent.
The rest of 98 percent of rural dwellers in the country remains without electricity supply and instead resort to the use of kerosene oil. On Wednesday this week, EWURA’s Director General, Haruna Masebu announced in a statement he issued to the media the newly introduced indicative prices for petroleum products in the country showing the reduction rate of new retail prices for petrol and diesel leaving behind kerosene oil. The statement said that, the change of petroleum product prices is in accordance with the response of the world market decrease of prices and the slight stability of the Tanzania shilling. It noted that, in line with the prevailing section legislation, prices of petroleum products are governed by rules that are determined by supply and demand. In early 1970, over four decades ago, the price of a twenty littre full of a tin of kerosene was sold at Tsh. 21 only, recalls mzee Zablon Megwe (78), now a retired prisons officer. He says by then kerosene was being sold in specially manufactured tins carrying 20 litres which nowadays are not in the market.  However, he added that, the retail prices for the commodity could be sold by shopkeepers running a retail shop in special locally made kits of measurements known as 'Kibaba'.  He said in an exclusive interview early this week in Dar es Salaam that, he could manage to survive with the little salary he was earning at that time of Sh. 620/- per month as a prison officer that could cater for other household needs for the whole month.  Now as a retired civil servant conducting his life at rural village where the majority of Tanzanians lives, hardly he could make his budget through if he dares to buy a 20 littre of kerosene for his home consumption and pays over Tsh. 40,000. “This is actually unaffordable to me” he said. He says, the money is almost equivalent in total to the amount paid for his monthly pension as a government retiree, and which are due paid in total as a lumpsum for six months amounting to Sh. 240,000. He wonders how inflation has affected Tanzania's economy. Statistics by the Central Bank of Tanzania (BOT) shows that, between 1970 and the last quarter of the country' financial trading period of the year 1972, one US Dollar was equivalent to Sh. 16.7. Whereas one British Pound was equivalent to Sh. 20/-. Economists says that, the gradual dropping of a shilling against dollar in the market has been hastened by the habit of transacting foreign exchange money notably US dollar in purchasing the commodity while abandoning the use of shilling from circulation, an aspect that causes gradual depreciation of a shilling.

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