Dar es Salaam: The Tanzanian government has cautioned that increasing fuel and fertilizer expenses may arise if the ongoing conflict in the Middle East continues, with recent disturbances in international commodity markets starting to impact local energy prices.
Delivering the 2025 Economic Conditions Report in Parliament on Thursday, the Minister of State in the President's Office (Planning and Investment), Prof Kitila Mkumbo, stated that ongoing political conflicts with Iran remain impacting international commodity markets, transportation expenses, and distribution networks.
The alert follows several weeks after the Energy and Water Utilities Regulatory Authority (Ewura) revealed fuel costs for June 2026, with the ongoing dispute between the United States, Israel, and Iran highlighted as a major influence on changes within the local oil market.
Although fuel costs in Dar es Salaam decreased marginally by 29 shillings per liter to reach 4,086 shillings, the cost of diesel went up by 85 shillings per liter, reaching 4,333 shillings. This occurred even though the government provided a subsidy of 534.91 shillings per liter meant to protect buyers from international price fluctuations.
As per Ewura, the dispute that started on February 28, 2026, has increased unpredictability in global petroleum markets and impacted nations dependent on fuel supplies from the Middle East, such as Tanzania.
MP Mkumbo informed Parliament that a study carried out together by the National Planning Commission and the United Nations Development Programme (UNDP) revealed that the conflict led to rising oil prices, greater transportation expenses, and interruptions in international supply networks.
"The conflict with Iran has triggered anxiety in worldwide oil markets because of concerns about interruptions in oil movement via the Persian Gulf and other key international sea lanes," he stated.
As stated in the report, the price of crude oil increased from approximately $100 per barrel in March 2026 to $126 per barrel in April, then decreased to range between $90 and $95 in early June.
The official stated that Tanzania continues to be at risk of such disruptions due to importing all its processed fuel oil, where between 60 and 70 percent comes from Middle Eastern nations, India, and Singapore.
The report also highlights that the farming industry may encounter more challenges since Tanzania purchases 30 to 40 percent of its urea and DAP fertilizers from Middle Eastern nations, mainly Qatar.
According to the report, any extended interruption in the area might raise expenses for agricultural producers and create higher demand for food prices.
Nevertheless, the administration thinks the crisis might also present chances for the nation.
Professor Mkumbo stated that Tanzania might gain advantages from higher demand for transit and freight storage services if access to certain Middle Eastern ports is limited due to ongoing conflicts.
"For instance, there is a chance to offer transshipment and freight storage services for ships that cannot transport goods to Middle East ports due to the ongoing conflict," he stated.
The administration additionally anticipates that Tanzania will draw in investors looking for alternate locations outside areas affected by conflicts as the execution of Vision 2050 accelerates.
The caution arises as Tanzania aims to keep up economic expansion, ensure stable prices, and draw in investments amid increasing unpredictability in the world economy.
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