DAR ES SALAAM: Tanzanian officials and economic analysts are urging calm and responsible fuel consumption as escalating conflict in the Middle East disrupts global oil supply chains, pushing up energy prices and raising concerns about inflation in import-dependent economies.
Governments across Africa and Asia are increasingly on alert as the crisis involving the United States, Israel and Iran unsettles global energy markets and threatens shipments through the Strait of Hormuz — a strategic maritime corridor that carries about one-fifth of the world’s oil supply.
Oil prices have already climbed sharply amid fears of prolonged disruption to Gulf exports, with analysts warning that prices could rise further if the conflict spreads or shipping routes remain restricted.
For Tanzania and many other developing economies that rely heavily on imported petroleum products, the surge in global prices is beginning to filter through to domestic fuel markets.
The Energy and Water Utilities Regulatory Authority (EWURA) this week announced new fuel prices, with diesel recording the steepest increase. In Dar es Salaam, petrol rose to about 2,864 Tanzanian shillings per litre from 2,788 shillings, while diesel climbed to 2,858 shillings from 2,701 shillings.
EWURA Director General Dr James Andilile attributed the adjustments to rising fuel prices in the Arabian Gulf market, where petroleum product benchmarks have increased significantly in recent weeks.
Government response
President Samia Suluhu Hassan has directed authorities to strengthen Tanzania’s strategic petroleum reserves to cushion the country from possible fuel shortages and price volatility linked to the crisis.
Speaking during the launch of new bulk fuel storage facilities at the Dar es Salaam Port, the president said expanding national reserves was essential to protect the economy from external shocks.
“Given current global energy disruptions, it is vital that Tanzania strengthens its capacity to withstand fluctuations in international oil prices,” she said.
The storage project, valued at about 678.6 billion shillings, is expected to expand the country’s strategic petroleum reserves and improve its ability to manage supply disruptions.
Inflation risks
Economists warn that uncertainty in global energy markets could translate into higher transport costs, rising food prices and pressure on currencies in many developing economies.
Gilbert Mwabeza, an economist at Marian University in Tanzania, said governments should provide clear guidance on fuel consumption and market expectations to prevent panic buying.
“This is the right time for authorities to evaluate petroleum stocks and communicate clearly about responsible consumption to minimise inflationary pressures,” Mwabeza said.
He warned that uncertainty often fuels speculation in supply chains, prompting transporters, wholesalers and retailers to raise prices prematurely.
“Inflation is sometimes driven by expectations. Panic buying and speculative price increases can worsen the situation unnecessarily,” he said.
TZ moves to expand fuel reserves as global energy volatility intensifies
Global ripple effects
The conflict has already disrupted shipping routes and energy infrastructure in parts of the Gulf, with several oil and gas facilities suspending operations and shipping insurers raising risk premiums for vessels operating in the region.
Analysts say prolonged disruption could tighten global supply and drive inflation in economies already grappling with rising living costs.
Energy shocks have historically spread quickly across global supply chains because fuel costs affect transport, agriculture, manufacturing and aviation.
In Asia, some countries have begun reviewing oil stockpiles and exploring alternative sources of supply as uncertainty grows over Middle Eastern exports.
Long-term energy resilience
Economists say the crisis highlights the vulnerability of many African economies to external energy shocks.
Investment banker and economic analyst Dr Hildebrand Shayo said countries like Tanzania must accelerate efforts to diversify their energy mix and reduce dependence on imported petroleum.
“Energy security has moved from a policy aspiration to a strategic economic necessity,” Shayo said.
He called for greater investment in natural gas utilisation, renewable energy expansion and improved energy efficiency to strengthen long-term resilience.
“Reducing exposure to volatile global oil markets will help protect households, businesses and national economies from geopolitical shocks,” he said.
Beyond fuel prices, the crisis may also affect sectors such as tourism and trade.
Air travel disruptions and rising aviation fuel costs could affect international routes connecting Africa to Europe and Asia through Middle Eastern hubs.
Economists say countries with diversified exports, stronger foreign exchange reserves and strategic fuel storage will be better positioned to weather the current turbulence in global energy markets.
For Tanzania, analysts say the immediate challenge will be balancing rising global energy costs with efforts to maintain economic stability and protect consumers from inflationary pressures.
