30 July 2012

Tanzania: Dar Incurs 20 Billion/ - Fuel Importation Loss

Dodoma — TANZANIA incurred a loss of 20bn/- from importation of petrol with high quantity of ethanol through Bulk Procurement System (BPS) between January and March, this year, the National Assembly was told here over the weekend.

Muleba North MP, Mr Charles Mwijage said this while contributing to the budget estimates for the Ministry of Energy and Minerals for fiscal year 2012/2013 that the country was made to pay US 1,000 dollars for a tonne of the ethanol blended petrol against the world prices of just US 200 dollars.

During the period, petrol worth 210bn/- was imported through BPS for both the local market and transit to land-locked neighbouring countries. "Laboratory tests by the Chief Government Chemist have proved that the petrol contained more ethanol than required specifications, but nothing has been done to address the situation," charged the MP.

Since introduction of BPS in January, this year, a total of 1,191,780 tonnes of oil have been imported as of June, this year while 617,178 tonnes were imported for the transit market. Imports of petrol have also increased from 160,000 tonnes per month to 198,000 tonnes.

Deputy Minister for Energy, Mr George Simbachawene admitted that petrol supplied between January and March contained higher levels of ethanol and said the government was working on it.

Presenting the budget estimates for the Ministry last Friday, the Minister for Energy and Minerals, Prof Sospeter Muhongo, said importation of off-specification petrol was among challenges facing the BPS.

He said the government had directed the Energy and Water Utilities Regulatory Authority (Ewura) and Tanzania Bureau of Standards (TBS) to make revisions on specifications for ethanol content on imported petrol as well as Regulations, Guidelines and tender documents for BPS.

Prof Muhongo also hinted on a possibility of empowering Ewura to conduct tests on imported oil since TBS lack capacity as it conducts only selected tests on the oil. Just recently, Ewura wrote to the Petroleum Importation Coordinator (PIC) to take actions on the importer of the disputed petrol, Augusta Energy of Switzerland.

The company has successfully won three consecutive tenders to supply fuel through BPS from January to June, this year, each tender covering two months. Its executives have repeatedly maintained that they supplied fuel that met specifications of Tanzania and thus been issued with clean certificate of quality by the TBS.

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