The Effect of Petrol Prices, Diesel Prices and Kerosene Prices on Consumer Price Index in Tanzania

Abstract

This study was about the effect of fuel product prices (i.e., petrol, diesel, and kerosene) on the consumer price index in Tanzania. The study used ordinary least squire model and the error correction model for making conclusion. The study used the monthly time series data from January 2015 to June 2024 obtained from the Bank of Tanzania. The study concluded that kerosene had significant effect on consumer price index but also kerosene price and petrol price had positive long run relationship with consumer price index while diesel price had negative long run relationship with consumer price index. Thus, the study recommended the provision of subsidies to the energy sector and the use of gas in running cars and in cooking at home for the household in order to control the consumer price index.