East African Business Week

DAR ES SALAAM, TANZANIA - The first delivery of bulk procured petroleum products is expected in the country soon after ministerial approval of importation procedures and regulations, the Minister for Energy and Minerals, William Ngeleja has announced.
He said  the Attorney General was in the final stage of studying the operational regulations pertaining to bulk imports.
 The Energy and Water Utilities Regulatory Authority (EWURA), Principal Communications and Public Relations Officer, Mr Titus Kaguo, said logistics around the creation of the bulk oil institution need ample time to ensure it will be smoothly conducted.
 "We would like to have the institution in place quickly enough, but the procedures of international tendering and other logistics need time," Kaguo told the East African Business Week in an interview last week.
 He said, the regulating institution will be solely under the oil marketing companies operating in the country. They will be mandated to pick the chairman and chief executive officer and other relevant staff.
 Other advantages of bulk oil purchasing are that Tanzania would be in better position to hedge itself against oil market price fluctuations. Currently the price of oil hovers around US$100 a barrel due mainly to Arab world unrests, fuelled by events in Libya.
Tanzania oil importers have been sourcing their oil independently and threatening the prices stability of this crucial product to the country's development.
 However, once the regulations are approved, the bulk purchase will be expected to stabilize prices of one shipment for at least six months, unlike today when prices fluctuations hit the oil markets every two weeks.
 The bulk oil procurement process will begin with the creation of an institution that will oversee the purchasing and pricing of the oil products.
The absence of an established oil importation procedures has pushed the country's pump prices to over Tshs2000 ($1.33) mark in Dar es Salaam and 2,100 ($1.39) per litre  upcountry by mid last week.
 The high cost of fuel is the biggest contributor to increasing consumer price index as the economy can not absorb imported inflation, that is beyond its ability. Tanzania's February 2011 inflation reached 7.5%.
 Oil stakeholders are demanding that the oil offloading facility at Kurasini Oil Jetty (KOJ) and Single Point Mooring (SPM) should be improved to speed up the offloading of oil. Dar es Salaam Port Manager Cassian Ng'amilo said recently that the two oil offloading points are undergoing major expansion to boost their deliverability capacity.