AN emergency meeting took yesterday (Tuesday)to discuss a shortage of gasoline and diesel that began last week when oil marketing companies refused to sell their products after the energy regulator reduced prices to its consumers.
The crisis talks were convened by the board of directors of the Energy and Water Utilities Regulatory Authority (EWURA) that set the obligatory price cuts last week.
"Most oil marketing companies seem to be against the new prices," said Titus Kaguo, the EWURA public relations officer.
As the talks began the state power utility, Tanesco warned that the shortage could affect power generation at fuel-fired emergency power plants, recently procured to ease the country's power woes.
"We are still assessing the situation because we don't want to be caught unawares," Badra Masoud, Tanesco's public relations manager said.
Tanzania generates around 200 megawatts of power from fuel-fired plants.
The oil marketing companies say they cannot afford to stick to the lower prices.
Salum Bisarara, the spokesman for Tanzania Association of Oil Marketing Companies, said if companies agree to sell fuel at EWURA's new prices, they would be losing up to 250 Tanzanian shillings ($0.16) per liter.
Last week, EWURA cut, from Aug. 3, diesel prices by at least 8% to ease the cost of the commodity on the local market. The regulator also slashed gasoline prices by at least 9%.
The scarcity is also hitting drivers with queues of motorists forming at gasoline stations, and trade officials said gasoline prices have nearly doubled.
The Tanzanian government insists that the new prices were reached after a prolonged consultative process and that the oil companies were fully involved.
The Tanzanian government is facing an ultimatum from the opposition to fix the economy and reduce fuel and food prices or face mass protests next month.
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