19 November 2012

Tanzania: Addax Energy Wins December Fuel Tender

THE Geneva-based Addax Energy SA has won a tender to supply oil for two weeks in December. This is the third time in a row that the oil conglomerate has won the lucrative tender.

Addax beat other close bidders, Vitol Oil SA and Augusta Energy SA, at a highly competitive tender process over the weekend, after offering the lowest price of 53.98 US dollars per weighted average premiums against 57.41 US dollars and 59.48 US dollars respectively.

Through the tender, Addax shall deliver 130,000 metric tonnes of diesel, 62,050 metric tonnes of petrol in addition to 22,200 metric tonnes of JET A1 fuel and 6,250 metric tonnes of Kerosene in the said two weeks ending December this year.

The company had also won tenders to supply petroleum products for October and November this year. Augusta Energy SA, also a Genevabased oil multinational had previously won three tenders to import oil through BPS.

The General Manager of Petroleum Importation Coordinator (PIC), Mr Michael Mjinja, said that a pre-qualification exercise for companies to supply oil for next year will be held next month.

Meanwhile, oil marketing companies (OMCs) have been urged to pen letters of credit on time to allow smooth discharging of oil products at the newly commissioned oil discharging facility, Single Point Mooring (SPM) at the Port of Dar es Salaam.

A letter of credit is a document that a financial institution or similar party issues to a seller of goods or services which provides that the issuer will pay the seller for goods or services the seller delivers to a third-party buyer.

Addax Energy SA Supply Manager for East Africa, Mr Julien Seddik, said in a statement over the weekend that failure by the OMCs to open letters of credit on time delays the discharging process for fuel imported through the Bulk Procurement System (BPS).

"As a supplier I will not be in a position to release oil before confirmation of payments through letters of credit," Mr Seddik said. Adding; "I am glad that my company has won the tender for the third time in a row. We hope that OMCs will timely open letters of credit to allow smooth off-loading of oil and eventually supplying the market."

The Addax official was highly optimistic that commissioning of the SPM will improve efficiency and reduce demurrage costs that have been incurred previously. Unlike the Kurasini Oil Jetty (KOJ), the newly commissioned SPM has a huge discharging capacity for various oil products which allows bigger ships to berth and discharge products.

Only pre-qualified companies are allowed to tender to supply oil through BPS, which was introduced in January this year to improve efficiency in the industry, reduce prices through economy of scales and enable the government tap requisite taxes among others.

Under the newly-introduced regulations, the tender size has been reduced to 30 days instead of 60 which covered the previous three tenders. The rationale for cutting down tender size was to reduce further the demurrage period currently at three days where six out of former eight of oil vessels will be berthing at the KOJ.

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