Tanzania, like every country in the world, is feeling the adverse effects of the ongoing oil crisis caused by the USA/Israel-Iran conflict. Previous oil crises have occurred before and each time they happen, our economy has never been left unscathed. It is estimated that the total economic cost arising from the current crisis is about $1.7 billion due to a higher import bill, slower GDP growth and inflationary effects.
In the midst of such crises, the government normally intervenes. These interventions include supply regulation, subsidies and other temporary measures. However, such interventions do not solve the crisis permanently. They only provide a cushion to keep the economy running as supply is disrupted and prices spike.
To find a permanent solution to recurring oil crises, we need to examine our fuel imports and their subsequent use. Tanzania imports about five billion litres of oil annually, of which 60 per cent is diesel, 20 per cent petrol, 15 per cent jet fuel and kerosene, and 5 per cent heavy fuel oil. This means that 80 per cent of fuel imports are used for automotive purposes. A permanent solution must therefore address this demand — and the solution lies in gas and electric vehicles (GEVs). From what we have seen in the past, and what we are likely to see in the future, GEVs are no longer an option; they are an imperative.
Let me propose a clear roadmap for transitioning to GEVs. In the short term, compressed natural gas (CNG) offers the fastest path towards reducing oil import dependence. Converting long-distance buses, trucks and urban public transport can deliver immediate savings because the gas supply is domestic. However, gas should not be the final destination. Electric vehicles (EVs) represent the long-term future. EVs have lower operating costs and produce zero carbon emissions. As battery prices fall and charging infrastructure expands, EVs will become increasingly affordable.
I suggest a three-phase transition plan spread over a period of 10 years. In the first phase (0–3 years), Tanzania should prioritise CNG adoption for public and commercial transport. This should include establishing refuelling stations along key economic corridors such as Dar es Salaam–Morogoro–Dodoma and Dar es Salaam–Arusha. Government vehicles should also be included in this phase. The government must lead by example.
Phase two (3–7 years) should scale up both systems. The CNG network can expand to smaller towns, while efforts to accelerate electric mobility should focus on urban transport, especially boda bodas and bajajis. Policy measures such as reduced import duties and financing mechanisms will be critical at this stage.
Phase three (7–10 years) should focus primarily on electrification. Nationwide charging infrastructure and local assembly of EVs should be prioritised. Over time, stricter emission standards can gradually phase out internal combustion engine vehicles.
The proposed transition plan is expected to cost between $2 billion and $3 billion over a 10-year period, but savings could reach up to $1 billion annually. The transition should therefore not be viewed merely as an environmental undertaking, but as a pathway to economic resilience. By using natural gas as a bridge and electricity as the final destination, Tanzania can reduce its vulnerability to global oil shocks, lower transport costs and build a modern and sustainable energy system.
