A year after it was licensed to operate, the state-owned Commercial
Petroleum Company of Tanzania (Copec) is struggling to raise the Sh50 billion
it needs to officially start operations.
The Energy and Water Utilities Regulatory Authority (Ewura) granted
Copec the business licence in September last year in a development meant to
breathe life into the company formed to ensure that Tanzania has enough fuel
stocks at all times—unlike the current situation where shortages (both
incidental and genuine) are common.
The TPDC principal marketing officer, Mr Leo Lyayuka, told The Citizen
yesterday: “We are looking for finance. We are discussing better terms to get
funds. According to our preliminary projections, we are still scouting for at
least Sh50 billion to implement our business plan.”
Without mentioning names, Mr Lyayuka said the government has been
engaging potential financial institutions to secure the much-needed funds.
Copec was set to run business not on pure profit motive but to lessen
handicaps, such as the perennial fuel crises, that have affected the national
oil market.
The need for Copec was underlined earlier this month when the country
found itself caught up in a “manmade” fuel shortage for almost three weeks,
prompting Ewura to demand that the 15 licensed oil importing companies explain
why they should not be penalised after they triggered a fuel shortage.
According to Mr Lyayuka, the national oil company is important
especially at a time when the country is embarking on heavy and long term
investment in the petroleum sub-sector. This includes construction of oil pipelines
to connect with upcountry regions that traditionally pay higher petroleum
prices due to transport costs.
Copec is meant to be operating under the existing oil marketing
conditions governed by 2008 Petroleum Act and operating regulations.
There are at least 15 major oil marketing companies operating in Tanzania, including Tanga Petroleum Co.
Ltd, DFCG International Ltd, Mohammed Twalib Petrol Station Ltd, Petro (T) Ltd,
Amazon Petroleum, Danvic Petroleum, Petrol Sol (T) Ltd and Bright Sta Energy
Co. Ltd.
Others are EXCO Oil Co. Ltd, Petromark Africa, Oil Link (T), Riva Oils
(T) Ltd, Metrol Petroleum (T) Ltd, Afroil Investment Ltd and Swiss Singapore
Oversees Ltd.
On Copec’s place in the bulk oil procurement system under the Petroleum
Importation Company (PIC), the senior TPDC official said it would interact with
other oil marketing companies because PIC is just a system of picking one bulk
oil importer on behalf of others.
Policymakers and experts have repeatedly raised concerns that delays in
kicking off Copec have affected the country’s capacity to cushion itself from
risks arising from the volatile domestic and global market for petroleum
products.
Recently, the minister for Energy and Minerals, Prof Sospeter Muhongo,
said the government was working on a lasting solution to the fuel crises, which
have had a knock-on effect on the national economy.
In his recent comments, a senior lecturer in business studies at Mzumbe
University’s Dar es Salaam’s campus, Dr Honest Ngowi, said that since fuel
prices are highly volatile due to fluctuations on the world market and an
unstable exchange rate between the shilling and US dollar, it was necessary to
have future or forward contracts between national buyers and suppliers of fuel
to mitigate price hikes.
“Fuel price instability is a big source of frustration in budgeting,
planning and implementation of the same,” Dr Ngowi said. “Stable fuel prices
are good in predictions of many economic fundamentals. That is why strategies
to stabilise prices are long overdue.”
Contracts stipulating pre-determined and stable prices in a specified
period can significantly contribute to stabilise fuel prices, according to the
lecturer.
Source: The Citizen, http://www.thecitizen.co.tz , reported by Ludger Kasumuni in Dar es Salaam
0 comments :
Post a Comment