WHAT happens when fuel prices suddenly shoot up, or petrol and diesel are not available at most filling stations? Often, it is total chaos as anxious motorists scramble to get a little fuel that might be available at some spots.
During such a period of scarcity, profiteers also emerge almost from nowhere, taking advantage of the situation to hoard fuel and sell it at any price they deem fit. Motorists may well remember what used to be a chronic problem of fuel adulteration.
This had compelled the government to impose a hike on kerosene price to curb cheating by some unscrupulous oil dealers. Kerosene, a cheaper fuel by then, was inconspicuously mixed with petrol and diesel resulting in a damage to motor vehicles and loss of billions of shillings in revenue.
However, such a scenario is now history, thanks to a swift action by the Energy and Water Utility Regulatory Authority ( EWURA), the watchdog in the energy industry.
EWURA is empowered by law to ensure that service providers comply to market forces and cannot randomly hike oil prices. When taking over EWURA leadership in February this year, the newly-appointed Director General Mr Felix Ngamlagosi noted that there were urgent challenges that needed to be addressed.
"Apart from licensing and reviewing tariff in the energy and water sectors, we also monitor performance and standards related to quality, safety, health and the environment," said Mr Ngamlagosi, adding that the regulator is also charged with promoting effective competition and economic efficiency, protecting the interests of consumers and promoting the availability of regulated services to consumers all over the country. To attain these targets, EWURA plans to open zonal offices to facilitate service delivery.
"While we would like to assure consumers and stakeholders of the Authority's continued commitment and adherence to rule of law and best practices of the international regulatory affairs, we are also contemplating to spread our wings by establishing zonal offices across the country," said Mr Ngamlagosi.
He also hinted on improving the investment climate especially in the energy sector by promoting investor friendly environment, as well as increase electrification rates and promote use of alternative generation methods (renewable energy). The energy sector is at the moment registering an upward trend, what with the coming in of the gas industry in the market.
Hence, beside seeking to improve the investment climate, EWURA is also strengthening its position to be a partner in the formulation and implementation of the National Policy on Natural Gas.
"We intend to maintain an active role in the development of the country's Natural Gas Policy and governing laws to ensure that this sector is adequately regulated for the benefit of all," said the Director General.
In this regard, the law empowers EWURA to regulate midstream and downstream activities of the natural gas sector. As such, it must monitor performance of the natural gas sector in relation to levels of investment, availability, quantity and standard of services; the cost efficiency of production and distribution of services.
The oil and gas industry, according to available information, is usually divided into three sectors; namely the upstream, midstream and downstream. The upstream sector involves exploration and production, while the midstream covers the transportation, storage, and wholesale marketing of crude or refined products.
The downstream part touches consumers through products such as gas, petrol, kerosene, jet fuel, diesel oil, heating oil, fuel oils, lubricants etc. In the crucial oil sector, EWURA seeks to ensure existence of competitive and level playing field amongst suppliers and retailers of petroleum products.
The regulator assesses the oil price on the international market and sets price cap on a monthly basis for fuel, in a practice that ensures there is consistency and no dealer unnecessarily violates the determined price.
In the water sector, according to the EWURA Director General, there are plans for both Dar es Salaam Water and Sewerage Corporation, and Dar es Salaam Water and Sanitation Authority (DAWASA) that specifically aim to improve production and distribution.
To attain this goal, the energy and water watchdog is set to engage a consultant who will make a better plan for water provision in the city of Dar es Salaam.
"We are planning to initiate a consultancy study on operations of DAWASA and DAWASCO to improve quality of water service in the greater Dar-es-Salaam area," said Mr Ngamlagosi. Water problems in Dare Salaam are just too obvious and the proposed strategy comes at a time when supply in the city stands at 300,000 cubic metres a day against the demand of 450,000 cubic metres according to DAWASCO.
Much of water produced at pumping stations is lost through either theft or leakage, and at times there is no sufficient water to enable enough production. In the fast growing city of Dar es Salaam, people have resorted to other sources, like drilling deep wells, to stem the chronic shortage.
According to the Director General, the regulator runs activities as provided for by law and is sometimes forced to make tough decisions that may not please some players in the energy sector.
This draws criticism and negative publicity orchestrated by some stakeholders, some of whom prefer to be regulated through a contract only, rather than the law. In some circles also, people tend to believe that the regulator receives too much than it deserves. "There is a negative perception that EWURA is awash with money, which might be abused.
Also, fears abound that the law that established the authority might be changed to curtail independent sources of funding," said Mr Ngamlagosi, when speaking on the challenges at hand. In the power sector, the EWURA lays emphasis on conducive investment climate to promote alternative power production methods (renewable energy)