Dar urged to review excessive levies on petroleum products

[BAK]

Dar urged to review excessive levies on petroleum products

By JOSEPH MWAMUNYANGE
THE EAST AFRICAN

Posted Friday, January 23 2009 at 19:18​

The Energy and Water Utilities Regulatory Authority's Consumer Consultative Council (Ewura-CCC) wants the charges imposed on refined petroleum products reviewed as they contribute to the high fuel prices in Tanzania.

"These charges constitute more than 60 per cent of the pump price," said a report by the Council.

It called for a drastic review of the charges to "ascertain their justification, relevance to the regulated goods and their impact on the overall pricing of petroleum products."

Among the charges is the Surface and Marine Transport Authority's levy of $0.25 per metric tonne.

According to the Council, this charge is provided for in Government Notice No. 214 of 2000, which mandated the then Tanzania Central Freight Bureau and the Surface and Marine Transport Authority's (Sumatra) to impose these charges.

"The Council would like a review of Sumatra services done to justify the continuation of this charge, and whether the services are based on the tonnage to justify charging per metric tonne," it said.

Other charges are 0.2 per cent of cost and freight; testing and inspection fee of $0.38 per metric tonne; wharfage 1.6 per cent of Cost Insurance and Freight plus 20 per cent VAT payable to Tanzania Ports Authority; and the $0.15 per metric tonne Tanzania Italy Petroleum Refinery fee to maintain facilities at Kurasini Oil Jetty.

"It is not clear why the Kurasini Jetty does not belong to Tanzania Ports Authority. Furthermore, the understanding of the Council is that the Tanzania Italy Petroleum Refinery, in which the government owns 50 per cent shares, is no longer in operation. Who is benefiting from this charge?"

The Council maintained that as long as the charges are passed over to the consumer, it is not in the interest of the operators to reduce them. It urged Ewura to take the lead role in the review of the charges "since one of its mandates is to protect the consumer."

"Total government taxes on petrol account for 47.27 per cent of pump prices - almost half of what the consumer pays for every litre of petrol is tax. Thus, the council urges the government to review tax structure on fuel with view to reducing the rates," said the Council.

According to the Council, Mozambique faced such a situation last year and scrapped all taxes on all petroleum products, except super petrol, making prices affordable.