Bulk procurement cut fuel import costs

The introduction of Bulk Procurement System (BPS) and Single Point Mooring (SPM) has helped to reduce by half the cost of importing petroleum products and curb congestions at the Dar es Salaam port.

Petroleum Importation Coordinator (PIC), General Manager Michael Mjinja told reporters in Dar es Salaam that through BPS, the import costs have dropped to around 37.33 US dollar per metric tonne in the 13th tender compared to the seventh tender’s 71.46 US dollars.

“The 18-month old BPS has proved effectiveness in controlling the cost of fuel importation,” said Mr Mjinja, adding that there has been an increase in awareness and support from oil marketing firms on the system usefulness.

Presently, the seabed multiple pipelines installation SPM can handle between two and three vessels loaded with diesel in a month, the move that has enhanced efficiency in handling oil tankers at the port.

The SPM and pipeline system can accommodate vessels of up to 150,000 tonnes of either crude oil or diesel, an improvement from the 35,000 tonnes handled previously using the old facility.

“The system has definitely helped in cutting down demurrage charges as well as assuring availability of fuel to cater for domestic demand and transit cargo,” said the GM, noting that the aim is to supply high quality petroleum products at low cost and timely.

He said the demurrage charges, for instance, dropped to around 2.07 US dollars per metric tonne in the 10th fuel importation tender compared to 10.44 US dollars charged at the seventh tender.

A total of 30 companies—five of them Tanzanian and the rest foreign— were pre-qualified this year. Only seven companies have participated in this year’s tender process, with only one local company—GAPCO Tanzania.

Mr Mjinja said the PIC was still mulling over Kenyan methods of tendering on product basis to see its practicability in the country, with the ultimate goal being to further reduce the costs.

Weak financial base that impedes timely payment to suppliers remains one among the serious challenges facing PIC while inadequate storage facility to accommodate local and transit fuel cargo
Source: The Daily News, reported from Dar es Salaam, Tanzania
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