Tanzania Grapples with Soaring Fuel Prices Amidst Middle East Conflict

Key facts

• Fuel prices increased significantly across Tanzania effective May 6, 2026.
• Government implemented a Sh259 per litre subsidy on diesel.
• Petrol in Dar es Salaam rose to Sh4,115 per litre, diesel to Sh4,248.
• Kerosene prices saw the steepest rise, reaching Sh4,677 per litre in Dar es Salaam.
• Geopolitical tensions in the Middle East involving Iran, the US, and Israel are cited as the primary cause.
• Disruptions to oil infrastructure and the closure of the Strait of Hormuz are impacting global supply.
• Remote regions like Kagera face the highest prices due to increased logistics costs.

Fuel Costs Surge, Government Intervenes

Fuel prices have surged across Tanzania, prompting the government to introduce a Sh259 per litre subsidy on diesel in a bid to shield consumers and vital economic sectors. The intervention comes as new retail prices, effective May 6, 2026, reveal substantial increases across petrol, diesel, and kerosene. These hikes are directly attributed to global supply disruptions stemming from escalating geopolitical tensions in the Middle East. The Energy and Water Utilities Regulatory Authority (Ewura) highlighted the critical role of diesel in the economy, underpinning industrial production, freight, and public transport services, thus making it the priority for the subsidy. Despite the government's efforts, pump prices have climbed significantly. In Dar es Salaam, petrol now costs Sh4,115 per litre, an increase of Sh295 from April's Sh3,820. Diesel prices jumped by Sh442 to Sh4,248 per litre, while kerosene experienced the most dramatic rise, soaring by Sh993 to Sh4,677 per litre.

Global Tensions Ripple Through Tanzanian Markets

The root cause of the price volatility is identified as the ongoing conflict in the Middle East, involving Iran, the United States, and Israel, which commenced in February. This conflict has severely disrupted critical oil infrastructure, affecting production wells, transportation networks, storage facilities, and refineries. A significant factor exacerbating the situation is the closure of the Strait of Hormuz, a vital maritime artery through which approximately 20 percent of global oil shipments pass. The disruption has led to reduced tanker traffic, considerable cargo delays, and a consequent escalation in both transport and insurance costs. "This has led to reduced vessel movement, congestion and further increases in global oil prices," stated Ewura Director General, Mr Gerald Maganga. Tanzania, reliant on imports from the Middle East for a substantial portion of its petroleum products, feels the direct repercussions of this global price surge, with domestic adjustments mirroring rising international costs and increased logistics expenses.

Regional Price Disparities and Logistical Challenges

While Dar es Salaam faces steep price increases, other regions are experiencing similar, and in some cases more extreme, trends. Tanga sees petrol at Sh4,176 per litre, diesel at Sh4,309, and kerosene at Sh4,738. Mtwara's prices are Sh4,207 for petrol, Sh4,341 for diesel, and Sh4,770 for kerosene. However, the most significant price pressures are concentrated in the remote northwestern and western regions. This is due to the extensive logistical costs associated with inland transportation from primary ports. Motorists in Kyerwa District, Kagera Region, are bearing the brunt, with petrol reaching a record Sh4,374 per litre, diesel at Sh4,360, and kerosene at Sh4,238. Similar elevated rates are observed in Misenyi and Karagwe districts within Kagera, and in the Uvinza and Buhigwe districts of Kigoma. petrol at Sh4,312 and diesel at Sh4,298, starkly contrasting with the lower prices found in port cities.

Regulatory Oversight and Enforcement Measures

Ewura has officially published the retail cap prices for petroleum products, confirming the sharp increase in costs. The regulator noted that the volatility is largely driven by a massive spike in Free on Board (FOB) prices and rising import premiums, compounded by a weakening local currency against the US Dollar. The authority has reiterated its commitment to vigilant market monitoring, ensuring that wholesalers and retailers adhere to the mandatory maximum price caps. Ewura has issued a stern warning: any fuel station found engaging in hoarding supplies or manipulating prices will face immediate legal action. Penalties for non-compliance include substantial fines or the permanent revocation of trading licenses. This regulatory stance underscores the government's determination to mitigate the economic and social impacts of the global energy crisis.

Tanzania's Position Amidst Regional Comparisons

Tanzania is among the first countries in East Africa to announce monthly fuel prices, often serving as a regional benchmark. Despite the current price surge, the country's fuel costs remain relatively competitive compared to some neighbours. In Kenya, petrol prices are reported to exceed Sh4,300 per litre, while in Uganda, they are approaching Sh4,500 in certain areas. Rwanda faces some of the highest prices in the region, with petrol surpassing Sh5,200 per litre. Energy analysts caution that global fuel prices could continue their upward trajectory. This is attributed to persistently higher freight, insurance, and supply costs, directly linked to the ongoing disruptions along key international oil transport routes.

The bottom line

• Tanzania's fuel prices have reached record highs due to global supply chain disruptions linked to Middle East conflict.
• The government has introduced a Sh259 per litre diesel subsidy to alleviate pressure on consumers and key industries.
• Petrol, diesel, and kerosene prices have all seen significant increases, with kerosene experiencing the steepest rise.
• Remote regions face the highest fuel costs due to substantial inland transportation expenses.
• Ewura is actively monitoring the market and warns of strict penalties for price manipulation or hoarding.
• Despite current increases, Tanzania's fuel prices remain somewhat competitive within the East African region.