8 January 2013

Tanzania: Fuel Importer Replaces Sub-Standard Diesel

THE Petroleum Importation Coordination (PIC) yesterday said the 100,000 tonnes of diesel alleged to be sub-standard has been replaced and was currently waiting for the standards regulator to test its quality before distribution.

The PIC General Manager, Mr Michael Mjinja, said the oil vessel arrived on Friday and immediately they wrote a letter to the Tanzania Bureau of Standards (TBS) to test its quality.

"We have notified TBS officially on the arrival of the vessel and pledged to confirm the fuel quality today (yesterday)," he said. Last week, TBS rejected 100,000 tonnes of diesel loaded in the MT AC BURAQ vessel for failure to meet the required standards.

To address the problem, Addax SA took a bold decision of sending the oil tanker with the petroleum products that have been deemed as sub-standard away for re-blending to ensure it meets the country's standards. In a statement, the company said it purchased the fuel from BP and that the certified loaded quality was in full conformity with the TBS standards.

Addax SA won tender number four, five and six. It said quality is a top priority for the oil products to conform to international standards. At the opening of the eighth tender where GAPCO (T) emerged victorious, Mr Mjinja said the one year existence of the BPS has been successful because it has assured security of fuel supply, correct records which in turn help the Energy and Water Utilities Authority (EWURA) in calculating cap prices for the local market.

However, he said pulling down premiums has been one of the challenges that PIC is facing which need to be addressed this year. For example, some bidders offered lowest prices in some petroleum products but their weighted premiums were higher.

PIC will in the future consider the system currently used in Kenya of separating tenders for each product to be imported to provide opportunity for bidders who offer low prices in some categories to win. Currently, bidder who offers lowest premium becomes the winner.

He cited the existing low storage capacity as another challenge that need to be addressed in order to capture the neighbouring market (transit fuel). Currently most fuel importers use TIPER for storage, whose capacity has been limited.

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