THE fuel price pinch could have been worse if the nation had not been using the bulk procurement system, according to the Commissioner of Petroleum and Gas in the Ministry of Energy, Mr Michael Mjinja.
There is apparently no let up in fuel rates as petrol and diesel continue to pinch in the world market, with the ongoing Ukraine-Russia crisis aggravating the situation.
But Mr Mjinja believes that the use of petroleum bulk procurement system (BPS) implemented through the Petroleum Bulk Procurement Agency (PBPA) has saved the nation from falling into the challenge of absolute lack of the commodity as has happened in some neighbouring countries.
“Oil prices are still going up and there could be no stability soon but the sure thing here for us is that the supply is guaranteed, the existing oil is sufficient and will continue to be available as planned,” Mr Mjinja said when interviewed by a local television station at the weekend.
“We have this assurance because the system we use to incorporate this fuel allows us to have robust plans in line with the verification of all the necessary information about the situation,” the commissioner added.
He said that prior to the introduction of the petroleum bulk procurement system, Tanzania was also facing the challenges of fuel shortages as the existing system provided an opportunity for traders to import fuel individually at a time that they deem appropriate according to their needs.
“The cost of importing fuel was very high, the cargo was being delivered by small ships, causing congestion at the port and vessels used to wait at outer anchorage for up to 40 days, something which did not guarantee the availability of the fuel,” said Mr Mjinja.
He said the system did not provide assurance of price stability as the Government was unable to monitor and determine the exact price of oil and transportation costs, but there was also no capacity to ensure the availability of fuel was in line with demand.
According to Mr Mjinja, it was for this reason that the government saw the need to establish a Petroleum Bulk Procurement System to protect the public from the impact of unsustainable prices as well as to ensure the nation is guaranteed access to the essential energy.
“Currently there are 39 wholesale oil companies each presenting their requirements and then the oil is imported in bulk, two months in advance to ensure there is no shortage. This helps the government know the needs and the amount we have,” added Mr Mjinja.
Interviewed on the Tv station, the Energy and Water Utilities Regulatory Authority (Ewura) Petroleum Business Manager, Ms Kemilembe Kafanabo noted that tenders for importation of petroleum products have been openly announced to allow participation of all companies with capacity and criteria to import the fuel at a competitive price.
“So if there is an importer who knows how he can get this fuel more cheaply, the opportunity is to participate in these tenders. There are 23 companies that participate in these tenders and since the participants in these tenders are many it is also not easy for them to even set a commercial plot to hike the price of oil,” Kafanabo said.