Statistical analysis of global crude oil and domestic fuel prices in Tanzania: the case of Dar es Salaam region

This study aimed at conducting statistical analysis of global crude oil and domestic fuel prices in Tanzania for Dar es Salaam region as the case study. Using monthly data of global crude oil price, exchange rate of USD to Tanzanian shilling and domestic prices of petrol and diesel; a multivariate regression model for estimating domestic prices of petrol and diesel for Dar es Salaam region was fitted. The study showed that monthly average of exchange rate lagged one period and monthly average of global oil price crude lagged two periods can be used to predict domestic prices of petrol and diesel for the current month. Moreover, the study showed that global crude oil price and exchange rate of USD to TZS contribute 85% of the variation in petrol price and also 85% to the variation in price of diesel. From the fitted multivariate regression model, the study showed that a change in monthly average price of global crude oil does not have same effect on the changes of domestic prices of diesel and petrol. Likewise, a change in monthly average exchange rate of USD to TZS does not have same effect on the changes of domestic prices of petrol and diesel.