Although global crude oil prices have dropped from about $112.9 per barrel in early April 2026 to around $87.3 per barrel by late May 2026, experts say this decline is unlikely to quickly reduce fuel prices in Tanzania.The main reason is that fuel pricing in the country is influenced by many factors beyond just crude oil costs.

These include transport expenses, insurance premiums, government taxes and levies, as well as other regulatory and operational charges along the supply chain.Economists explain that fuel prices at the pump are the result of accumulated costs from importation to distribution.Even when crude oil prices fall, other components such as insurance costs or transport charges may rise, cancelling out potential savings.

Tanzania also experienced fuel price increases earlier in April due to tensions in the Middle East that disrupted oil infrastructure, including wells, storage facilities and refineries, leading to higher transport and commodity costs.

The government has introduced a subsidy of Sh259 per litre of diesel to cushion consumers and support key sectors such as transport and industrial production.Energy regulator EWURA also plays a key role in reviewing pricing structures and setting price ceilings to balance consumer and trader interests.

Economists further note that Tanzania uses a pricing formula based on reference prices from previous months, meaning current pump prices reflect earlier global market conditions rather than real-time changes.Additionally, fuel already imported at higher prices remains in the system before cheaper stock arrives.Inflation also rose to 4.0 percent in April 2026 from 3.2 percent in March, mainly driven by transport and food costs, further complicating price adjustments.Overall, experts say fuel price changes must be gradual and carefully managed due to fiscal and market stability considerations.