Author: LYDIA SHEKIGHENDA
AfricaPress-Tanzania: TANZANIA is set to maintain stable, reliable and affordable fuel supply as the Tanzania Petroleum Development Corporation (TPDC) through its oil subsidiary firm, TANOIL, enters the oil business.
TPDC is now effectively engaging in the fuel business through the Petroleum Act 2015 which allows the company to operate commercially.
According to TPDC, before 2000, the corporation was engaging in the business, but there was no specific law governing its involvement in the trade, the enactment of the law has allowed it to embark on official fuel importation and distribution.
The Act has enabled the TPDC to form a subsidiary firm, TANOIL, which is mandated to undertake commercial activities related to the midstream and downstream oil subsector in Tanzania which includes refined petroleum products, strategic petroleum reserve, and strategic investment in the oil business.
In the first five years of President John Magufuli’s administration, TPDC has managed to construct some retail petrol stations in various regions and is currently finalising procedures before it embarks on the business by the end of this year.
The company was recently given a plot at Kigamboni in Dar es Salaam Region on which 15 oil storage tanks are set to be constructed as TANOIL starts to spread its wings across the country.
The development is in line with the government’s pledge to strengthen TPDC, in the provision of high quality fuel to be sold at a cheaper price, and bringing it closer to the people.
Tabling his budget estimates for 2020/2021 for the Ministry of Energy, Minister, Dr Medard Kalemani said the government was proceeding with procedures for the establishment and management of strategic fuel reserves and engagement in the fuel business.
Dr Kalemani said in the 2019/2020 fiscal year, various activities were implemented including completion of various studies related to oil business, registration and securing of strategic areas in Dar es Salaam, Tanga, Morogoro and Dodoma.
“The government through TPDC has set aside 31.2 bn/- in 2020/2021fiscal year for implementing various activities that include securing areas earmarked for the business, official start of fuel business and clearing of various operational costs,” Dr Kalemani said.
“TPDC through TANOIL will participate in the fuel importation and distribution business just like other oil marketing companies in order to enhance competition…this shall also widen the presence of local companies in the fuel business as it is overly dominated by foreign firms at present,” he said.
TPDC Managing Director Dr James Mataragio said that the company is fully committed to entering into the oil business and to compete with existing companies.
He said apart from the storage facilities being used to supply commercial fuel they would also be used to reserve oil for the government, insisting that TANOIL operations would be service oriented.
According to him, their ambitions over the next five years would be to build more than 100 fuel stations across the country.
In an exclusive interview recently, TANOIL General Manager Eng Kapuulya Musomba told the ‘Daily News’ that the newly established company will help reduce government dependence on taxes as a source of revenue since it allows more companies to engage in businesses and get income.
He said that through its participation in the fuel business, TPDC will be in a better position to advise the government on various issues related to oil because it will have experience from the ground.
“The government has various regulatory bodies such as the Energy and Water Utilities Authority (EWURA) and Petroleum Bulk Procurement Agency (PBPA) but it lacked an oil company which could help to know the actual situation on the ground; the engagement of TPDC in fuel business is, thus, crucial,” he said.
Eng Musomba further said that the move was also crucial for national security because it is difficult for the State owned oil company to collaborate with private companies to form a syndicate for certain interests.
Eng Musomba named some of the retail petrol stations that have been constructed by the government through TPDC as Musoma, Segera, Singida, Geita and Makuyuni and that they will be opened at the end of this year.
