Market & Finance

Petrol falls, diesel rises as Tanzanian govt doubles fuel subsidy

The new price schedule shows that petrol in Dar es Salaam will retail at a maximum of Sh4,086 per litre, down from Sh4,115 in May

Dar es Salaam. Motorists using petrol will pay less for fuel this month after the Energy and Water Utilities Regulatory Authority (Ewura) lowered the cap price of the commodity for June 2026.

The new price schedule shows that petrol in Dar es Salaam will retail at a maximum of Sh4,086 per litre, down from Sh4,115 in May.

The Sh29 reduction offers modest relief to consumers after fuel prices surged in recent months.

Diesel users, however, face higher costs.

The cap price of diesel has increased to Sh4,333 per litre from Sh4,248 recorded in May, representing an increase of Sh85 per litre.

The rise comes despite government efforts to shield consumers from escalating global energy costs.

To cushion the economy from the impact of rising diesel prices, the government has increased its subsidy on the fuel to Sh534.91 per litre.

The subsidy is more than double the Sh259 per litre support provided in May and is aimed at easing pressure on transport operators, manufacturers and other productive sectors that depend heavily on diesel.

The latest fuel price adjustments come against the backdrop of continuing instability in the Middle East.

The conflict involving the United States, Israel and Iran has disrupted global oil supply chains and increased uncertainty in international energy markets.

Industry observers say restrictions affecting movement through the Strait of Hormuz have pushed up shipping and insurance costs for petroleum cargoes, increasing the cost of imported fuel for countries such as Tanzania.

Although the decline in petrol prices is expected to provide some relief to private motorists and businesses that rely on petrol-powered equipment, the increase in diesel prices may continue to place pressure on transport and logistics costs.

Diesel remains the dominant fuel used by trucks, buses, industrial machinery and a significant portion of the country’s freight transport system.

Any increase in its price is closely watched because of its potential impact on the cost of moving goods and services across the economy.

The June prices follow a sharp increase recorded in May when petrol jumped by 7.7 percent and diesel by 11.6 percent as global oil prices soared amid escalating geopolitical tensions.

The new fuel prices took effect on June 3, 2026.

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