Tanzania has reaffirmed its commitment to the bulk procurement of petroleum products, despite rumours that some within the industry are attempting to scuttle the plan.

Minister for Energy and Minerals William Ngeleja said the Attorney General’s Office is putting final touches on the plan before it is presented to the cabinet for final approval.

The system seeks to make it mandatory for importers to jointly procure petroleum products under international competitive bidding, through a private company to be run as a joint venture with a government corporation, Commercial Petroleum Company of Tanzania Ltd.

Oil marketing companies are against the current system of marketing fuel and also the bulk procuring of petroleum products.

A recent meeting that brought together the Tanzania Revenue Authority, the Energy and Water Utilities Authority (Ewura), the Tanzania Ports Authority and the Parliamentary Committee for Energy and Minerals, deliberated on the envisaged bulk procurement and its implications for costs and fuel marking.

The current procurement and distribution system is managed by the oil marketing companies.

Proponents of bulk importation say since Ewura was given the legal mandate in 2007 to oversee the implementation of the new system, the authority has had a rough time.

The executive director of the Tanzania Association of Oil Marketing Companies, Salum Bisarara, told the meeting that the system could not be implemented with the current equipment at the port.

However, Ewura director general Haruna Masebu opposed this view arguing for an immediate start.

“We can start now and enjoy partial benefits while also gaining experience from the exercise, or we can wait until a new SPM (Single Point Mooring) and SBM (Single Buoy Mooring) are in place. I would rather we start now and reduce costs incurred by importing companies, which are passed on to customers,” said Mr Masebu.

A contractor has already been identified to start the installation.

The committee had met to discuss, among other issues, how to intensify the battle against fuel adulteration, to curb the rising of fuel prices and to align stakeholders with the bulk fuel procurement system. 

TRA Commissioner for Customs Walid Juma said that if there were any weaknesses in the system, it should be improved instead of abandoning it as suggested by some oil marketing companies.    

The fuel marking system, which is operated by Global Fluids International (T) Ltd and uses X-ray fluorescence technology, was introduced in September last year.

Ewura communications officer Titus Kaguo explained that the rate of fuel adulteration had greatly decreased. 

“Our statistics show a drastic decrease of kerosene imports, alongside an increase in petrol and diesel imports,” said Mr Kaguo.

Kerosene is the major ingredient used in adulteration.

According to Mr Kaguo, before the fuel marking exercise, petrol imports stood at an average of 34 million litres per month, but between September last year and February this year, this had increased to 43 million litres per month.

Meanwhile, diesel imports, previously averaging 69 million litres per month, had increased to 88 million litres per month while kerosene imports decreased to 19 million litres from 30 million litres previously.

“This shows that the culprits who had been importing kerosene for mixing have stopped doing that, for fear of being caught and taken to task,” he said.

Mr Kaguo said inspections conducted in 10 regions recently revealed that out of 120 fuel stations inspected, only 14 were found to have out-of-specifications fuel.

XRF technology is able to detect both adulterated fuel and transit fuel. In the inspection, 16 petrol stations were found to be selling transit fuel in the domestic market.