New dawn for consumers as fuel prices exepected to drop

Josephine Christopher is a senior business journalist for The Citizen and Mwananchi newspapers

Mwananchi Communications Limitted

What you need to know:

In the new system, the government said yesterday that it would now start importing the products directly from refineries that are owned by countries which also produce crude oil

Dar es Salaam. Tanzanians should expect stability in fuel prices starting December this year as the government starts a new system of importing petroleum products.
Tanzania imports about 3.5 billion litres of refined petroleum products yearly: petrol, diesel, kerosene, Jet-A1 and Heavy Fuel Oil (HFO).
Under the new system, the government said yesterday that it would henceforth import the products directly from refineries that are owned by countries which also produce crude oil.
This, Energy minister January Makamba said yesterday, would cut the role of intermediaries in the fuel marketing chain.
He said the Tanzania Petroleum Development Corporation (TPDC) will be given the mandate of importing fuel for use in the country.
This would be a shift from the current system whereby fuel is imported by private companies through the Bulk Procurement System (BPS).
The move to change the importation system follows a joint official trip to the three crude oil producing countries of Saudi Arabia, United Arab Emirates and Algeria by Mr Makamba, TPDC’s managing director James Mataragio and Oil and Gas commissioner at the Energy ministry, Mr Michael Mjinja.
The trip was conducted on October 22-29 this year.
He, however, noted that the BPS mode would remain. But the government will work to eliminate flaws in the system.
Mr Makamba said the government facilitated TPDC to take part in a competitive bidding with other international companies that usually take part in the BPS bidding every month.
“TPDC has won the tender after it bade the lowest price - and, therefore, it will import fuel for December this year.
“This would reduce the price of fuel for the month of December,” Mr Makamba said in a statement yesterday.
This is the second time in two months that the government is intervening in the fuels market.
Last month, President Samia Suluhu Hassan directed the reduction of a total of Sh102 billion in various fuel levies in an effort to cushion consumers against rising global fuel prices.
Mr Makamba said yesterday that the visit to crude oil producing countries was a deliberate move intended to find new ways of bringing more relief in fuel prices.
The government would also exchange experiences and strengthen diplomatic and economic ties with the countries.
Tanzania, he said, would strike agreements of cooperation in the matters of oil and gas with the countries for the general good of Tanzania - agreements that are to be finalised within two weeks.
“We have also succeeded in persuading the countries we visited to cooperate with us in building a large fuel storage facility (fuel terminal) for the domestic market - but one that can also supply to other countries in the East and Central African region - and even beyond,” said Mr Makamba.
He also said hat this would ensure a steady supply of the product to consumers.
The current reserve can also sustain for 15 days only.
in the meantime, he said, the government will establish a temporary strategic petroleum reserve.