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Minister: Billions saved from bulk oil imports

The deputy minister for Energy and Minerals, Mr Charles Mwijage (middle), talks to the managing director of Petroleum Importation Coordinator (Pic) Ltd,  Mr Michael Mjinja (left),  and the managing director of First National Bank Tanzania, Mr Dave Aitken (right) during the opening of a trade training session on letters of credit and guarantees to petroleum importation coordinators. The event was organised organised by Pic and First National Bank that also sponsored it. PHOTO|THE CITIZEN CORRESPONDENT

What you need to know:

  • Deputy minister Charles Mwijage says Tanzania saves at least $60 million per year which was being lost through cumbersome procedures of the previous system

Dar es Salaam. Tanzania has been saving billions of shillings since the country started importing petroleum products in large quantities (bulky procurement system) a few years ago, the deputy minister for Energy and Minerals said yesterday.

Mr Charles Mwijage told participants in a training programme in the city that the country is saving at least $60 million per year which was being lost through cumbersome procedures of the previous system.

Importing petroleum products in bulk helps Tanzania to benefit from economies of scale, a situation that has helped to soothe price increases compared with the previous system where importers operated as individual entities.

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“I want to assure all stakeholders that the government is committed to ensuring fair play in the oil importation sector and the availability of affordable products,” the newly appointed deputy minister said at a training programme that was funded by FNB.   The FNB-funded training, he said, would help to ensure professionalism in the handling of bulk procurement services.

The deputy minister said that with the previous system where importers conducted the business individually, the process of chasing invoices was tedious and time consuming, but with the oil importers coming together, the process has become time effective.

He expressed his optimism that in the near future the industry will see more local companies importing petroleum products, saying that the government is willing to create a conducive environment for them. On his part, the Petroleum Importation Coordinator managing director Michael Mjinja said that one of their challenges included demurrage charges incurred when importers operated individually.

He said that the bulk procurement system was introduced by the government in 2011, and it has seen positive impact ever since.

He said almost every oil marketing company in the country is involved in the training to supplement the success of the system, adding that they believe it will increase efficiency

Currently, a litre of petrol in Dar es Salaam stands at Sh1,768 while diesel and kerosene fetch Sh1708 and Sh1657 respectively.

But Mr Mjinja is on record as having been quoted as saying that going by the trend of price increases before introduction of the bulk procurement system, a litre of diesel, kerosene and petrol would now be fetching not less than Sh3,000.

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