Tanzanians Set for Continued Fuel Price Relief Through 2026
Dar es Salaam. Tanzanians may enter 2026 with further relief at the pump as global oil markets continue to show signs of weakening, setting the stage for a sustained drop in local fuel prices after months of gradual easing.
Updated energy pricing data from the Energy and Water Utilities Regulatory Authority (Ewura) shows petrol prices have fallen steadily since April across all major ports, driven largely by cooling global benchmarks, improving supply conditions, and a softer premium on geopolitical risk.
In Dar es Salaam, petrol prices dropped from Sh3,037 in April to Sh2,749 in December, with similar downward trends recorded in Tanga and Mtwara. Local industry players say forex movements have also played a pivotal role.
The Secretary General of the Tanzania Petrol Stations Operators Association (TAPSOA), Tino Mmasi, said the recent slide in fuel prices has been driven partly by the weakening of the US dollar and the strengthening of the Tanzanian shilling during 2025.
"The decline in global oil prices has been supported to a great extent by the shilling gaining strength against the dollar," he said.
"If you look closely at the period between October and November, the exchange rate stabilised, and oil prices also remained almost unchanged. That stability helped cushion local pump prices."
Mmasi added that the outlook for 2026 will depend heavily on currency trends.
"As we move into 2026, we will be watching the direction of the dollar very closely. So far, the trend has been favourable for Tanzania, and that has translated into significant relief at the pump," he said.
The global picture now strongly favours a continuation of this downward trend.
Geopolitical Developments Support Price Decline
Oil markets are closely watching renewed Russia–Ukraine peace efforts, which could reshape sanctions and potentially unlock new volumes of Russian crude. Traders are awaiting the outcome of the negotiations to see whether sanctions on energy giants such as Rosneft and Lukoil could eventually be eased—moves that would free up restricted oil and add more supply to already softening markets.
Market analysts note that while oil markets do not appear to price a large probability of a near-term peace agreement and removal of sanctions on Russian oil, even the possibility of peace continues to exert downward pressure on speculative premiums.
Industry observers note that attention remains fixed on the talks, which could eventually lead to Russia increasing its crude and product exports again, although that path is likely to be long. Even a slow normalisation would tilt global supply further into surplus.
Structural Market Changes Point to Lower Prices
Beyond geopolitics, structural market dynamics appear to be turning decisively bearish. Market analysts expect an expanding supply–demand imbalance in the coming years, projecting that oil supply will grow at three times the rate of demand in both 2025 and 2026.
"Demand, defying widespread bearish sentiment, has consistently exceeded expectations," according to market analysis. "Yet supply has outpaced these gains by more than twofold, with the bulk of growth coming from the Americas."
For import-dependent markets like Tanzania, that trend is likely to translate into continued downward pressure on pump prices—particularly for petrol, which has been more responsive to global price movements than diesel.
Diesel Remains Volatile but May Join Downtrend
Diesel has shown a more uneven pattern through the year. In Dar es Salaam, prices fell from Sh2,936 in April to Sh2,704 by October, before edging back up to Sh2,779 in December as global gasoil inventories tightened.
The last-quarter uptick reflects stronger shipping demand, refinery maintenance cycles and higher seasonal consumption in Europe. Even so, if the global supply expansion projected by analysts materialises, diesel could also enter a more sustained decline in early 2026.
Meanwhile, kerosene, heavily used in rural and peri-urban households, has been the most volatile product, with sharp mid-year fluctuations. Prices in Dar es Salaam dropped from Sh3,053 in April to Sh2,653 in December, but remained highly sensitive to import timing and domestic consumption cycles.
