Bureaucracy at its best

BAK · 2011-06-29T01:13:18+00:00

How bulk oil will be imported Tuesday, 28 June 2011 22:41 By Frank Kimboy The Citizen Reporter Dar es Salaam The government will establish three bodies and revive a bulk fuel storage facility.That will be the arrangement in bulk fuel procurement, new regulations show.The Citizen has obtained a copy of the regulations, which came into effect after being gazetted early this month.The document shows that three bodies will come into effect in three months. They are the Bulk Procurement Committee (BPC), the Petroleum Importation Coordinator (PIC) and the Bulk Procurement Technical Committee (BPTC). PIC will be formed by Oil Marketers Companies (OMCs) and will be responsible for coordinating the bulk oil procurement process. BPTC will be composed of government entities, representatives from oil marketing companies and the Tanzania Petroleum Development Corporation. It will act as an implementer of the process. BPTC, whose members will be appointed by the minister responsible for energy, will also take over PIC responsibilities when it fails to carry out its activities efficiently. Under the regulations, a limited liability company will be established and form a PIC board of directors with representation in a ratio of 3:2:1 from large, medium and small OMCs respectively. OMCs will also fund PIC operations in the same ratio as their representation to the board of directors. According to the regulations, any OMC who will not join PIC will be committing an offence, which, upon conviction, will be liable to a Sh5 million fine and will have a licence suspended for a year.PIC, as required by the regulations, will be responsible for collecting procurement requirement from OMCs, before floating a tender for bulk fuel procurement. The document notes that an OMC that intends to buy fuel will be required to have a contract on supply and shipment of products with PIC.PIC will also be responsible for conducting an international competitive bidding for bulk procurement as well as preparing plans and a budget to cover its operations. OMCs, from within the country, will also be allowed to submit their bids to PIC once a tender is announced, the document explains further. The PIC shall ensure that each tender process comprises strict sanctions for a supplier who delivers petroleum or petroleum products that fail to meet approved specifications, the regulations point out.To enhance transparency, PIC will be required to submit monthly reports to the Energy and Water Utilities Regulatory Authority (Ewura). To prevent the shortage of fuel while the system comes to effect, all OMCs having storage facilities at Kurasini Oil Jet (KOJ) are required to upgrade and maintain at least two lines from KOJ to their storage facilities within 12 months. They will also be required to replace their lines with those of larger diameters of not less than 10 inches. At the same time, the Tiper manifold and flow meters at the KOJ should be upgraded within 12 months from the time the regulations came into effect.This is aimed at increasing vessel discharge capacities for a sub-36-hour discharge for a single product maximum sized cargo. OMCs that fail to upgrade or maintain their lines from KOJ to their storage or upgrade of the Tiper manifold will be subjected to a Sh5 million fine every day on which contravention continues.Under the new system, the first bulkily procured oil consignment is expected in the country in five to six months from the time when the regulations came into effect, Ewura director general Haruna Masebu said. The regulations require PIC to be formed within three months but keeping in mind the process of tendering and biding, it will take up to five or six months before a first consignment under this particular system arrives in the country, he noted.However, Ewura will continue to mark petroleum products to prevent oil procured for transit to be sold in Tanzania. According to the regulations the use of bulk procurement for petroleum or petroleum product for transit purposes shall be optional.Mr Masebu also told reporters that plans were underway by the Tanzania Ports Authority to construct a single point mooring an offshore facility to speed up the offloading of petroleum products from tankers. The bulk procurement of petroleum products is aimed at lowering oil prices since it will be possible for the importer to negotiate for lower buying price and shipping costs. The move is also expected to curtail incidences of fuel adulteration by some unscrupulous dealers who strive to maximise profits. Tanzanias oil importers have been sourcing their oil independently, with prices being unstable.It is hoped that when the new system is established fuel prices will become stable. A rise in fuel prices has a serious economic impact. The year-on-year inflation rate rose to 9.7 per cent in May, from eight and 8.6 per cent in March and April respectively.

Thread starter BAK
Start date Jun 29, 2011

BAK

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Jun 29, 2011

Kamundu

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Bureaucracy at its best

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