The Energy and Water Utilities Regulatory Authority (EWURA) in Tanzania has implemented various measures to reduce the costs associated with fuel importation, including a review of the Bulk Procurement System (BPS) tender premiums. These actions come in response to directives from the Deputy Prime Minister and Minister for Energy, Dr. Doto Biteko, aimed at addressing the challenges faced by Tanzanians due to high fuel prices. During a visit to EWURA offices in Dar es Salaam in September, Dr. Biteko emphasized the importance of finding lasting solutions to the fuel price challenge. He acknowledged that factors such as low fuel production, currency exchange rates, and global market dynamics contribute to fuel price fluctuations, but he also stressed the need to address internal factors within Tanzania.
One of the key directives from Dr. Biteko was to review the BPS tender premiums used for importing petroleum products. The goal is to ensure that Tanzanians pay a fair and reasonable price for fuel. In addition to the premium review, Dr. Biteko directed EWURA to examine the entire price planning system to align monthly price caps with the actual market conditions. He also encouraged the use of Compressed Natural Gas (CNG) as an alternative fuel source to reduce tailpipe emissions and dependence on imported fossil fuels.
Dr. James Andilile, Director General of EWURA, stated that an initial assessment of premiums has been conducted with the aim of involving more local oil marketing companies in the importation of fuel. Currently, there are over 75 oil marketing companies in Tanzania, but only 18 are pre-qualified to participate in the bidding process through the Petroleum Bulk Procurement Agency (PBPA). Out of these 18, only five are actively engaged in the bidding process.
To encourage more companies to participate and discourage fuel hoarding, EWURA has revised regulations. They plan to implement new measures by the end of the year. Additionally, EWURA has reduced the period for oil marketing companies to import fuel from once every six months to once every three months, based on their market share. Dr. Andilile also mentioned that Tanzania Petroleum Development Corporation (TPDC) is involved in importing fuel and recently won a tender for the next consignment. The goal is to establish a single fuel price applicable throughout the country, and EWURA is committed to ensuring effective fuel importation. They will also monitor vessel queues to prevent delays that can lead to price increases.
Tanzania Association of Oil Marketing Companies (Taomac) and Tanzania Petrol Stations Operators Association (TAPSOA) have collaborated with the government to maintain a consistent fuel supply in the country. While these measures are expected to reduce fuel prices, it is noted that fluctuations in global crude oil prices can offset some of the impact of reduced BPS premiums.