Government defends TPDC's involvement in fuel trade

Dodoma. The government defended its position on the fuel trading system yesterday, reiterating that there was no problem with state-owned entities engaging in the marketing of the commodities.

The Minister of Energy, Mr January Makamba, told Parliament that as long as there were a number of departments within Tanzania Petroleum Development Corporation (TPDC), there was nothing wrong with its involvement in fuel marketing.

“The TPDC has several departments which work on various aspects, and therefore its involvement in the fuel trade will not have any negative impact on its activities,” he said when winding up the debate on the Sh2.7 trillion budget for the ministry for the financial year 2022/23. MPs approved the budget.

Mr Makamba was specifically responding to views from some MPs who opposed the fuel importation system under the Petroleum Bulk Procurement Agency (PBPA).

Some MPs who debated the budget on Wednesday and yesterday said the fuel importation system should be reviewed.

Gairo MP Ahmed Shabiby said there was fraud in the system and ever since it was launched Tanzania has witnessed the constant mushrooming of petrol stations almost everywhere.

“We have witnessed a mushrooming of petrol stations since the system was launched, It means there is a lot of cash in system,” he said.

Similar sentiments were aired by the Musoma Rural lawmaker and former energy minister, Prof Sospeter Muhongo, who opposed the system, saying it was because of it that TPDC had abandoned its core duties of exploration of oil and natural gas.

He said, instead, TPDC was now busy with importing and distributing fuel.

In April, 2022, Mtera MP Livingstone Lusinde said Tanzania should establish a National Strategic Petroleum Reserve in the next financial year to cushion the country from rising fuel prices

However, the government floated a plan to establish the reserve ten years ago, but never implemented it.

This is not the first time that Mr Makamba is defending the government’s position on the system being used in fuel importation in Tanzania since prices started rising unabatedly due supply chain disruptions, precipitated by the US-led sanctions on major producer, Russia in response to the war in Ukraine.

Last month, Mr Makamba informed legislators to be aware of the fact that the BPS system had been at the centre of conflict of interest among three key players in the petroleum business. These include: the filling station owner, the Oil Marketing Company (OMC) and the supplier.

“The system has always been at the centre of misunderstandings among key players. Though it [the system] does have some weaknesses, they are being amplified so that we either allow the system to operate while competing with a new one or we completely do away with it and get back to the past one [the past system before the BPS] which did not guarantee us fuel supplies,” he said last month, detailing a number of initiatives that the government would take to bring fuel prices down.

And, responding to some concerns by MPs yesterday, Mr Makamba said construction of the Mwalimu Nyerere Hydropower Dam will be delayed by two years, noting however that the contract between the government and the company building the project gave the rights and duties to be followed by each party in such occurrences.

“The Kidatu Hydropower Dam took five years to complete; the Mtera Dam took four years to build while the Pangani Dam took five years to construct. For us, what matters is the quality of the project,” he said.

On the US-based international power producer Symbion Power, Mr Makamba said the government paid a total of Sh300 billion in February last year (2021) after the two parties reached an out of court settlement to end a contractual dispute between them.

“As we are talking, the plants have been taken by the government and they are currently being used to generate 112 Megawatts of electricity generation,” he said.

On Wednesday, Mr Makamba sought Parliament’s approval for the Sh2.7 trillion budget for his ministry for the financial year 2022/23.

The amount symbolizes an increase of Sh320 billion or 13.4 percent compared to last year’s Sh2.38 trillion.

Mr Makamba told the House yesterday that about 99 percent of the money will be directed to development projects with most emphasis given towards completion of strategic projects and improving distribution and supply of electricity, oil and gas across the country