TANZANIA WILL NEVER BENEFIT FROM LOW OIL PRICES.............. A RESPONSE TO JOHN MASHAKA DEBATE

Ankal Michuzi,

First and foremost, I must compliment our brother, learned colleague and our superstar, John Mashaka for his extra ordinary brilliance in articulating some issues we see so difficult to touch. While we may try to argue as much as we can, the truth of the matter is, John Mashaka is another level of intellect, John is a genius as some describe him, and few will dispute that

I am a PhD student at the University of Melbourne Australia, specializing in Macro Economics. I read with lot of interest John Mashaka’s analysis on the fall of oil price in the commodity markets, its impact and opportunity for Tanzania.

While I do agree with John on many aspects, and support his arguments by 100%,  I would like to challenge him to be forthcoming. He was very diplomatic in his writing and never touched on the root cause of the problem.  Why the oil price never change in Tanzania, despite the fall of the global prices.

John never told Tanzanians that, Petroleum price in Tanzania would never change because Tanzania doesn’t have refinery. It buys refined petroleum products from the middle East. John knows very well that, there is a an international cartel that controls oil trade.

These corrupt officials are making billions of dollars on petro-chemicals, and do not like to lower prices and therefore fixing it all the time in Tanzania. The same cartel and the corrupt officials within the regulatory body, ensures prices aren’t changed despite the drop from the world markets. Therefore drivers in Tanzania would never enjoy low prices. Oils price started dropping in 2014. Today as John said, it has dropped by 74% yet in Tanzania oil has dropped by only 2%, and that was after pressure from the public. 

Tanzania tax on petrol is too high, and the government cannot expect the economy to grow this commodity is unaffordable

EWURA would claim that, they are selling old stock of Petrol and Diesel. That is not true, because basically an old stock only lasts for 30 days before a new stock comes in IN Tanzania. from 2014 Until today, they have the old stock?  President Magufuli must deal with EWURA. It is this EWURA pushing inflation higher, sabotaging the Economy, and therefore the country will never enjoy low prices of oil.