20 October 2012

Tanzania: Oil Companies Complain to TRA Over Storage of Petrol

GOVERNMENT is being asked to take a firm position on the use of the Single Point Mooring (SPM) in discharging fuel to oil marketing companies.

This follows complaints by five oil marketing companies to Tanzania Revenue Authority (TRA) that the decision to use TIPER tanks to store oil pumped from SPM is not economically viable. The companies are GAPCO, Puma, Oilcom, Cameloil and GBP. A source at TRA told this paper that the companies want a parallel system that will pump oil to TIPER and their tanks directly.

In view of these complaints, TRA has convened a stakeholders' meeting on Tuesday next week to discuss the issue the source revealed.The source said that storing oil at TIPER is the best option at the moment to avoid demurrage charges and also ensure the bulk oil procurement system (BPS) is run smoothly.

Government must maintain its position that oil should be stored at TIPER to avoid frustrations.The source says for the system to run smoothly, purchase, receiving and storage must be done centrally.You can not have two parallel systems if the BPS is to achieve its intended goals.

The initial idea for introducing BPS was to buy oil from a single source, then receive it at a designated point and finally have a central storage, system the source said.

He added that the Tanzania Petroleum Development Corporation (TPDC) and the Tanzania Ports Authority (TPA) should invest more on TIPER to boost its storage current capacity standing at 147,000 m3. The petroleum storage firm which has the largest storage capacity in Tanzania is jointly owned by government of Tanzania and ADDAX, a Swiss company, each with a 50 per cent stake.

The source said if individual oil marketing companies are allowed to receive their share directly from SPM, then the idea of introducing BPS would be defeated. "Before BPS was introduced in January this year, individual companies used to import directly. This created room for companies to avoid paying proper taxes to the government. Now, storing fuel at single point will enable TRA to monitor the entire process", the source said.

The 70 million US dollar (about 112bn/-) SPM seabed multiple pipelines installation project constructed at Ras Mjimwema, Kigamboni, has a discharging capacity of around 3,500 litres per hour hence cutting down the mooring time to one day from the current period of between four and five days.

Out of the 70-million-US dollar loan, CRDB Bank gave Tanzania Ports Authority (TPA) 60 million US dollars (about 96bn/-) and the remaining 10 million US dollars (about 16bn/-) comes from the Port's coffers.

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