Oil firms formally protest over ‘bad’ petrol

Oil marketing companies have formally accused the supplier of petroleum products through the bulk procurement system (BPS), Augusta Energy, over what they claim to be poor quality petrol supplied between January and March, this year.

Swiss-based Augusta Energy has won three consecutive tenders to supply oil to Tanzania through the bulk procurement system from January to June 2012 with each tender covering two months.

In a letter dated April 5, 2012, to the Energy and Water Utilities Regulatory Authority (EWURA), the oil companies, through their umbrella association, Tanzania Association of Oil Marketing Companies (TAOMAC), say they suspect the petrol to have been blended with ethanol.

“As provided under the BPS manual, we formally register a dispute with EWURA for handling and request the performance bond to be held by EWURA while the dispute is being handled,” the letter, signed by TAOMAC Executive Director, Mr Salum Bisarara, reads in part.

TAOMAC also wants EWURA to compel Augusta to submit the port’s certificate of quality for the vessels that discharged fuel between January and March.

“Since the product is suspected of being blended with ethanol, could EWURA give the results of test samples sent to the government chief chemist as promised before the parliamentary committee on energy and minerals and also advise if “ethanol blended” petrol is allowed in the country and to what extent?” the companies query in their letter.

Reached for comment on Sunday, the Director General of EWURA, Mr Haruna Masebu told the ‘Daily News’ that the authority was awaiting test results from the chief government chemist.

“It is true that we have received such complaints. Samples have already been taken to the chief government chemist. Other tests conducted on the same have indicated that the fuel is not contaminated.

“However, we cannot ignore complaints from the public; we took the samples to the chief chemist because they have better equipment. We have been pressing the chemist to provide us with the results,” Mr Masebu said.

Nine oil marketing companies have reported various inadequacies with the fuel, ranging from malfunctioning digital flow meter, failure of dispensing units as well as failures of motor vehicles.

The companies include Gapco, Engen, Mogas, Tiper, NATOIL, Hass, Kobil, OilCom and PUMA Energy (formerly BP Tanzania).As a result of the “poor quality fuel,” the oil marketing companies say they are incurring financial loss in maintenance of equipment, replacement of the product, repair of customers’ vehicles as well as loss of revenue due to lack of sales.

“There is a letter from Rwanda that is in circulation branding Mogas as a supplier of contaminated fuel,” Mogas claimed in the letter while Hass said four of its trucks have been held in Kigali, Rwanda, and refused to offload.

Mogas also said it has also incurred high truck demurrage costs waiting for action in Lubumbashi, Democratic Republic of Congo (DRC) and Kigali in Rwanda. OilCom said 10 trucks were rejected by dealers on concerns of quality whereas 10 of its network of retail outlets in Dar es Salaam were also affected.

The oil marketing companies also allege in their letter that they are made to pay for a price differential of approximately 700 USD per metric tonne as the price of ethanol is about 30 per cent of pure petrol in the world market.
Source: The Daily News,http://dailynews.co.tz, reported by Alvar Mwakyusa
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