By Business Insider Reporter
According to new official statistics, Tanzania’s oil import bill fell to US$2.52 billion in the year ending May 2025, down from US$2.79 billion during the corresponding period a year earlier, reflecting both a slowdown in global oil demand and a continued reshaping of energy market fundamentals.
The latest Bank of Tanzania (BoT) review of the national economy put the total import bill during the period at nearly US$17.69 billion, rising from about US$16.14 billion recorded in the year ending May 2024.
“The increase was largely driven by higher imports of industrial transport equipment, raw materials, and increased freight payments,” the central bank explains in the June 2025 Monthly Economic Review (MER).
Sectoral records show that the oil import bill decline comes despite the country’s consistent annual import of 2.7 million tonnes of refined petroleum products under its centralized bulk procurement system.
The easing of the import bill underscores how subdued international oil prices and softened demand across emerging markets – including Tanzania – are influencing national import dynamics.
For context, Tanzania’s oil import bill has experienced significant fluctuations over the last decade. In 2014, refined petroleum imports peaked at US$3.66 billion, representing over 33% of total imports.
By 2020, this figure plummeted to just US$730 million, largely due to collapsing global demand amid the COVID-19 pandemic. In the 2021/22 financial year, oil imports stood at US$1.59 billion, accounting for about 14.2% of Tanzania’s total imports.
The current reduction to US$2.52 billion comes at a time when the International Energy Agency (IEA) is forecasting global oil demand growth to slow to just 700,000 barrels per day in 2025 – the lowest rate since the 2008 financial crisis, excluding the pandemic downturn.
Demand growth in the second quarter of 2025 shrank to just 550,000 barrels per day, with emerging markets, including Sub-Saharan Africa, contributing little to the upward trajectory.
Meanwhile, global oil supply has surged. In June alone, output rose by 950,000 barrels per day, with OPEC+ nations accounting for 1.9 million barrels per day of the year-on-year growth.
The rapid ramp-up in production – particularly from Saudi Arabia and non-OPEC+ nations – has left the market oversupplied, keeping oil prices in check despite geopolitical tensions such as Israeli strikes on Iranian facilities.
In June, benchmark North Sea Dated crude averaged US$71.35 per barrel, a modest increase from the previous month but still well below price levels a year ago. Though prices briefly spiked past US$80 amid Middle East tensions, they quickly eased following a ceasefire.
Tanzania’s reduced oil bill thus reflects both these external pressures and local consumption trends. Although refinery runs globally are set to peak this Northern Hemisphere summer, and observed global oil inventories have risen by nearly 74 million barrels in May, subdued emerging market demand has kept import costs more manageable for oil-dependent economies like Tanzania.
However, the reprieve may be temporary. With refinery throughputs climbing and the typical seasonal spike in crude burning for power generation underway, pressure could build in the second half of the year.
Additionally, China’s aggressive strategic stockpiling – which absorbed 82 million barrels in Q2 alone – is distorting supply-demand balances and may eventually drive prices upward.
For now, Tanzania appears to be benefiting from a rare convergence of global oversupply and weakened consumption.
The lower import bill not only eases pressure on the current account but could provide some fiscal space for energy investment or price stabilization efforts domestically. Still, policymakers remain cautious. With over 14% of the nation’s imports still linked to petroleum products, global market volatility continues to pose a structural risk – one that may only intensify as global economic and geopolitical uncertainties evolve.
