Tanzanias government introduced a 10 percent per gallon duty on base oils imported into Tanzania, with an additional 1.5 percent railway levy duty. The duties on finished lubricants and additives remained unchanged at 25 and 10 percent, respectively.
Some local blenders raised concerns that the new tariff will hurt the competitiveness of locally blended lubricants. Irfan Khan, general manager for General Petroleums operation in Tanzania, said, It will surely affect our export orders, which we have committed before to clients in neighboring African countries.
We are just afraid that the new tariff regime may open the Tanzanian market to a flood of imported substandard products from Middle Eastern and Gulf countries, Khan said. He added that local blenders are not against a smaller hike in the duty on base oils but expressed concern that the Tanzania lubricants and grease market is a new industry that they are interested in developing and growing.
Samir Manik, group head of marketing at Oilcom in Tanzania, said the new duty on base oils, coupled with the falling exchange rate of the Tanzanian shilling against the U.S. dollar, exerts upward pressure on prices for finished lubes manufactured in Tanzania.
Salum Bisrara, executive director for the Tanzania Association of Oil Marketing Cos., said, It is an act of parliament, and we have to accept it and join with the government for the prosperity of our country.
Khan concurred, I think the Tanzanian government is doing enough to stabilize the Tanzanian currency against the U.S. dollar.
Tanzanias Ministry of Energy and Minerals spokesman didnt respond to multiple requests for comment from Lube Report by deadline.