OVER 321bn/- in value added tax (VAT) has been collected by the government in the past seven years from natural gas extracting companies and manufacturers using the resource.

Speaking in Dar es Salaam yesterday, Commissioner for Energy and Petroleum Affairs, Eng. Hosea Mbise, said that the revenue was collected from natural gas sales.

Eng. Mbise said that apart from increasing government revenue, natural gas extraction and utilisation, the resource has also assisted other sectors cut production costs such as manufacturing industries, transport sector, energy sector and district councils where the gas is extracted in Kilwa (Lindi) and Mtwara Rural in Mtwara Region.

"We as government expect to increase natural gas use by building good infrastructure that will help to produce the commodity in large quantities so as to increase government revenue and cut industrial costs," he said.

Eng. Mbise added that apart from natural gas being used as energy, it is also used as raw material in some industries manufacturing plastic products, methanol and other chemicals for both local and export markets.

"We expect to have 3,000 megawatts of electricity generated from natural gas starting later, this year to 2016 that will satisfy domestic consumption while some will be exported," he noted. The commissioner noted that use of natural gas in the country is becoming popular replacing imported oil as a major source of energy to households and industries.

He noted that currently, 50 per cent of electricity used in the country comes from natural gas. The country has over 40 trillion cubic feet of natural gas in Kilwa and Mtwara Rural districts where commercial extraction for power generation started over a decade ago.

A joint Chinese and Tanzanian government project to extract gas from Mnazi Bay will generate 400MW of power in Mtwara thanks to a General Electric, Symbion Energy and Tanzania Electric Supply Company partnership.