9 November 2012

Tanzania: Plans in Pipeline to Stock Petrol

Dodoma — IN the wake of the current shortages of petroleum products in the local market, the government plans to introduce Strategic Petroleum Reserve (SPR) to ensure the country has adequate stock of fuel at all times.

The move aims at making certain that there is enough oil in the economy for precautions purposes in case of emergencies, Deputy Minister for Energy and Minerals, Mr George Simbachawene, told the National Assembly .Similarly, the Ministry of Energy and Minerals is considering reviewing regulations guiding Bulk Procurement System (BPS) towards efficiency of the scheme for the national interest.

The Deputy Minister said the recent shortage of the precious liquids was among others caused by inefficiency by the Petroleum Importation Coordinator (PIC), an entity charged with coordinating importation of oil through BPS."At present, the government has been forced to restructure the PIC Board of Directors to address challenges that have afflicted the industry," Mr Simbachawene said while submitting a government report on shortages of oil in the august House.

The Speaker of the National Assembly, Ms Anne Makinda, had on Friday last week directed the ministry to come up with a statement regarding the scarcity, following concerns raised by a number of lawmakers attending the ongoing session.Joint efforts are also underway between the Ministry of Energy and Ministry for Transport, for speedy functioning of the Single Point Mooring (SPM) to improve oil discharging capacity at the port of Dar es Salaam, according to Mr Simbachawene.

The Deputy Minister had earlier indicated that poor discharging infrastructure at the port, was also among factors that led to the shortage. The existing facility, the Kurasini Oil Jetty (KOJ)'s capacity has been overwhelmed by increased demand for oil for both local and transit markets."It should also be noted that oil marketing companies have been complaining, not officially though, on the pricing formula used by the Energy and Water Utilities Regulatory Authority (EWURA).

"However, in most cases the companies complain when prices of petroleum products have decreased. In some incidences they even hoard the commodity," he said.Scarcity of fuel in neighbouring land-locked countries also made responsible authorities to allow priority docking for ships with oil stock for the transit market at the expense of domestic demand, the Deputy Minister told the august House.

At present, demand for fuel in the domestic market stands at more than five million litres per day. Average demand for diesel is 3.54 million litres while petrol and kerosene is 1.7 million and 200,000 litres per day respectively.Bulk Procurement System for petroleum products became operational in January, this year. Its introduction was aimed at enhancing transparency in the lucrative industry and also towards reducing pump prices.

Meanwhile, a total of 1.4trl/- has been saved thanks to the effective regulation of the Energy and Water Utilities Regulatory Authority (EWURA) between 2009 and August 2012, it has been learnt.The EWURA Director General, Mr Haruna Masebu, told a press conference yesterday that had the authority not started regulating fuel, the 1.4trl/- would have landed into the pockets of fuel dealers and not into the economy.

"EWURA is not well liked because of this but we are first in the interest of the consumers and then the suppliers. To date petrol is the only commodity in the country with the most stable prices," he said. Mr Masebu cautioned the media to always look at the bigger picture when writing stories and shouldn't easily get away.

He said that during the recent problems of fuel supplies, many fuel suppliers had tried to hijack the situation and point fingers at EWURA as being a bad regulator and the cause of the problems."Allow me at this juncture to say that in all aspects that led to the problems namely infrastructure problems and priority berthing, the authority has no say in any of them," he said.

Mr Masebu said that he welcomed the recommendations that were presented during the Parliament sessions by the Deputy Minister for Energy and Minerals especially on the strengthening of regulations for Bulk Procurement System (BPS).

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