SETTING prices of petroleum products below import cost is to blame for current fuel shortage in the local market rather than delivery disruptions at the port of Dar es Salaam, according to stakeholders in the industry.
The Energy and Water Utilities Regulatory Authority (EWURA), the industry regulator, sets indicative prices for fuel every month and stakeholders in the lucrative industry blame the same for setting prices below costs incurred by importers.
"Prices announced by EWURA early this month are lower than prices quoted by the importer of oil through Bulk Procurement System and this explains the shortage in the market," a source in the industry who requested to remain anonymous said.
The industry regulator had early this year cut the price of petrol in Dar es Salaam by 306/- (13.30 per cent) to 1,994/- per litre, down from 2,300/- in the previous month and lowered that of diesel by 192/- (8.96 per cent) to 1,993/- compared to 2,142/- in September. "Poor knowledge in managing the industry is responsible for the current shortage of fuel in some parts of the country," the source said.
Due to price uncertainty, oil marketing companies can hardly store enough stock of the precious liquid, the 'Daily News' was told. "If five ships with a combined capacity of 185,000 tonnes discharged fuel over the last two weeks as confirmed by the Petroleum Importation Coordinator (PIC), then why the shortage, where has the fuel gone?" the industry source wondered.
Adding; "There is something that is not being said here that prices announced by the regulator are lower compared to the costs of importation." The fuel shortage is yet another test for BPS, which was designed to, among other things, improve transparency and reduce prices of fuel.
"Even we at PIC are surprised that the country is facing shortage despite importation of the 185,000 tonnes over the past two weeks," the General Manager of PIC, Mr Michael Mjinja, told the 'Daily News' in a telephone interview. He also blasted claims on 'price uncertainty,' noting that all players were aware of factors used in computing the indicative price.
EWURA's Manager for Communications and Public Relations, Mr Titus Kaguo, maintained that priority berthing given to ships with transit and heavy furnace oil (HFO) had disrupted continuous supply of fuel and thus the shortage.
Meanwhile, as the fuel shortage continues to be hard felt especially in remote regions, in Sumbawanga a litre of petrol sells at 5,000/- in the black market.
Only one petrol station, out of six in the municipality had fuel on Wednesday, which sold at 2,167/-. There were long queues of motorists and others with jerry cans waiting for the scarce commodity. The situation is also serious in Songea where most outlets had run out of stock and a litre of petrol in the black market reached 3,000/-.