Tanzania: Oryx Gas Hikes Consumers of Liquefied Petroleum Gas Prices

By Alfred Zacharia

Dar es Salaam — Consumers of Liquefied Petroleum Gas (LPG) - at least consumers of the Oryx brand of the gas - will have to dig deeper into their pockets to

purchase gas-filled cylinders. This comes about following announcement of new wholesale prices by the company in Tanzania.

Oryx issued a notice to retailers yesterday detailing increases in wholesale prices of its LPG, citing rising world market prices, compounded by hightransportation costs.

Currently, seven percent of Tanzanian households use LPG as their main source of cooking energy amid intensified campaigning countrywide to use the energy as the preferred alternate to wood charcoal and firewood.

Part of the message to retailers stated as follows: "Oryx Gas informs you (dealers) that, from 5 February 2020, you will buy LPG gas cylinders at Sh19,500 for 6kg, Sh48,000 for 15kg and Sh95,000 for 38kg cylinders."

End-user prices would be Sh22,000 for a 6kg cylinder, Sh54000 for a 15kg cylinder and Sh105,000 for a 38kg cylinder.

This is an increase of 22.22 percent and 14.89 percent on the retail prices for consumers of the 6kg and 15kg cylinders respectively.

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LPG consumption in Tanzania in the 2018/19 financial year which ended on June 30, 2019 was 145,800 metric tons compared with the 142,940 metric tons that were consumed in the previous financial year, according to the Energy and Water Utilities Regulatory Authority (Ewura).

The Ewura technical manager (Petroleum), Mr Shabani Selemani, said the authority has yet to start regulating natural gas prices. But, it can intervene when prices seem to be unrealistic.

"We contacted Oryx Gas after hearing of the new higher prices and they confirmed that it is true - for two reasons: the increase in global prices; and higher transportation costs," Mr Selemani said.

He then revealed that the authority is conducting a review to determine whether or not the new prices are realistic.

Ms Tausi Mbowe - an LPG retailer based in Kimara, Dar es Salaam - said that, beginning from yesterday (February 5, 2020), consumers of LPG packaged in six and 15 kilo cylinders pay Sh22,000 and Sh54,000 respectively. Before thay, they were paying only Sh18,000 and Sh47,000.

"I got the (Oryx) message on Tuesday night - and commenced charging the new prices on the next day," she said.

However, other LPG suppliers who were reached by The Citizen - including Taifa Gas ('Mihan' gas) and O-Gas - said they had not changed their wholesale prices.

An O-Gas dealer, Mr Issa Mabuda, said he had not received any notice regarding new prices by yesterday as announced by other players in the business.

"I still buy the gas at the same (old) price of Sh16,000 per 6kg cylinder - and retail it at Sh18,000," he said.

O-Gas is owned by Oilcom Company, and has LPG stocks in 6kg, 15kg and 38kg pachaging for both domestic and commercial applications.

The executive director of Taifa Gas Ltd, Mr Hamis Ramadhani, said LPG price changes are quite a normal thing. However, his company has not announced new prices so far.

"Prices of cooking gas change regularly, depending on market situations and operational costs. I cannot tell when we will change our prices. But one thing is for sure: there are no 'indicative prices' in this field," he said.

According to Ms Mary Cosmass, a resident of Tabata Kisiwani in the commercial capital, the 6kg cylinder containing 'Mihan' LPG (Taifa Gas) was re-filled or exchanged at Sh17, 500 as of Tuesday this week.

News by the Organization of Petroleum Exporting Countries (OPEC) is that oil prices jumped by more than three per cent on Wednesday. This came on the back of reports that scientists had developed an effective drug against the fast-spreading coronavirus that had weighed heavily on global economic activities.

Both Brent crude futures and US West Texas Intermediate (WTI) crude jumped in the morning trade. By 09:47 hours GMT, Brent was up $1.44 - or 2.6 percent - reaching $55.40 a barrel, while WTI was up $1.19 (2.4 per cent), reaching $50.80 a barrel.