MPs oppose current fuel buying system

Dodoma. Members of parliament have opposed the fuel importation system under the Petroleum Bulk Procurement Agency (PBPA).
Speaking on separate occasions while debating Energy Ministry’s revenue and expenditure estimates for the 2022/23 financial year, two lawmakers said the fuel importation system should be reviewed.
Gairo MP, Ahmedy Shabiby said there is fraud in the system and ever since it was launched Tanzania has witnessed the constant mushrooming of petrol stations almost everywhere.
“We have witnessed mushrooming of petrol stations since the system was launched that means there is a lot of cash in system,” he said.
For his part, Musoma Rural lawmaker and former energy minister, Prof Sospeter Muhongo opposed the system saying as a result the Tanzania Petroleum Development Corporation (TPDC) has abandoned its core duties of exploration of oil and natural gas.
He said, instead, TPDC is now busy with importation and distribution of fuel.
In April, 2022, Mtera lawmaker Livingstone Lusinde, demanded that Tanzania should establish a National Strategic Petroleum Reserve in fiscal year 2022/23 to cushion the country from rising fuel prices
However, the government floated a plan to establish the reserve 10 years ago, but never implemented it.
While tabling his ministry’s revenue and expenditure estimates for the 2022/23 financial year, Energy minister January Makamba on Wednesday June 1, said the government plans to improve fuel supply in the country as well as take measures to curb rising costs associated with the Covid-19 pandemic and ongoing tensions in Europe.
Mr Makamba added that the measures include the setting up of a strategic petroleum reserve as well as a fuel price stabilisation fund (FPSF), and increased support for Tanzania Petroleum Development Corporation (TPDC) and its subsidiaries Tanoil and Gasco.
“Through the FPSF, there will be relief from rising prices as the money will be used to cover increasing costs,” he said asking the Parliament to approve a total of Sh2.9 trillion.
The PBPA was launched in September, 2015 under the Executive Agencies Act, vide GN. No. 423 of 25th September, 2015. As prescribed in the Regulations, the Agency is mandated to administer and manage the importation of petroleum products in the country.
When Tanzania transformed its bulk procurement system for petroleum products into a single product tendering system, making it possible for importers to bid to supply Jet A1, petrol and kerosene separately.
Tanzania had introduced the bulk procurement system (BPS) in January 2012, establishing a database on consumption trends in a bid to get the best price on the world market and guarantee quality of imported products.
The Petroleum Importation Co-ordinator Ltd (PICL), now known as Petroleum Bulk Procurement Agency (PBPA), prequalifies suppliers eligible to participate in tenders for the supply of petroleum products in Tanzania mainland annually. At the beginning of every month, PBPA circulates a notice to oil marketing companies requesting product requirements from the start of the second month from the PBPA notice.
PBPA consolidates all the requirements and prepares a tender document indicating the specific quantity of diesel, petrol, Jet A1 and kerosene to be supplied by the winning bidder.
With only locally registered oil marketing companies will be allowed to bid for the importation of petroleum products in the country.
Since the system was launched there have been complaint from various stakeholders and lawmakers that the system should be reviewed.