Agency floats tender for LPG bulk procurement
What you need to know:
- Tanzania is expected to import Liquefied Petroleum Gas (LPG) under bulk procurement system, of which is seen as a solution on pricing system, as currently, each companies importing the commodity have their own price structures.
Dar es Salaam. The Petroleum Bulk Procurement Agency (PBPA) has floated a second tender for the supply of liquefied petroleum gas (LPG) through bulk procurement.
PBPA executive director Erasto Mlokozi told The Citizen yesterday that the first tender announced in October was shelved because many potential bidders were not aware.
Earlier, reports said the Energy and Water Utilities Regulatory Authority (Ewura) intends to regulate LPG prices through bulk procurement as is the case with petrol, diesel and kerosene. Ewura also seeks to limit importation of LPG to butane in addition to creating an enabling environment for investors.
However, Mr Mlokozi said PBPA was yet to receive a directive from Ewura on whether to procure butane or propane.
Some stakeholders have opposed Ewura’s choice of butane on the grounds that it was more expensive than propane, which is currently being supplied in the domestic market.
Butane and propane are used for the same purpose, although they have some differences that make the former more expensive.
Southern African Development Community member states use mostly propane, and Tanzanian companies have invested heavily in facilities for this particular type of LPG.
PBPA said its aim is to increase the number of suppliers participating in bulk procurement of LPG and increase competitiveness with a view to reducing prices.
“We expect Ewura to make the final decision, but in the meantime we have infrastructure for the storage of both butane and propane LPG,” Mr Mlokozi said. PBPA said in a statement that it would prequalify suppliers for participation in mandatory bulk procurement of LPG.
Reached for comment, Mihan Gas managing director Hamis Ramadhani said he had not seen PBPA’s announcement.
“Our earlier concern was about the type of LPG we will be required to procure, but as far as I know, Ewura has yet to state its decision,” he said.
Oryx Gas commercial and sales manager Mohammed Mohammed said some companies were setting up the necessary infrastructure in readiness for bulk procurement of LPG. “Suppliers are making sure that they will be ready for the exercise when it starts. We have vastly expanded our storage capacity from what it was three years ago,” he said.
