Tanzania depends exclusively on imports for its oil requirements.
The country's dependency on oil imports has made it very vulnerable
to increases in world oil prices and local oil demand. For
instance, due to the increase in demand and prices the value of the
country's oil imports rose from US$ 400.3 million in 2003 to US$
1.1 billion in 2005. Therefore, it is obvious that the cost of
importing oil is a heavy burden for the country's economy. This
study is an attempt to contribute towards the knowledge base
regarding the feasibility of producing biofuels in the Tanzania so
as to reduce the country's dependence on oil imports. The results
show that ethanol can be produced in the country for as low as US$
0.276 per litre by using sugarcane as a feedstock. Moreover, the
results show that ethanol produced in the country can compete with
traditional fossil petrol if world oil prices would not fall below
US$ 30 a barrel. Since the world oil price is well above US$ 30 a
barrel, then it can be concluded that ethanol can be produced
competitively in Tanzania. Moreover, the results show that the
production of biodiesel would require the world oil price to be at
least US$ 60 a barrel.
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