Friday 20 October 2017

Tanzania: Drivers Smile to Fuel Tanks As EWURA Reduces Prices

Tanzania: Drivers Smile to Fuel Tanks As EWURA Reduces Prices
(Tanzania Daily News 08/02/17)
Tanzania: Drivers Smile to Fuel Tanks As EWURA Reduces Prices

The Energy and Water Utilities Regulatory Authority (EWURA) has reduced cap prices for petroleum products for the month of August with the public witnessing continued drop in prices for the months of April, May, July and August.

According to a statement released yesterday by EWURA Acting Director General Engineer Godwin Samwel, the prices that shall be applicable effectively today have dropped by 36/- and 44/- per litre of petrol and diesel, respectively.

But the retail prices of kerosene have gone up by 24/- per litre due to increase in Bulk Procurement System (BPS) premiums. The average daily consumption now stands at between 100,009 and five million gallons of diesel, petrol and kerosene per day.

Effective today, a litre of petrol in Dar es Salaam will be sold at 1,978/- from the previous 2,014/-, while a litre of diesel will now be sold at 1,830 /-, up from 1.874/- while kerosene will slightly go up to 1,830/- to previous 1,806/-.

However, Eng. Samwel said that, for Tanga region only, there will be no price changes for petrol and diesel due to the fact that there was no consignment received through Tanga Port in the month of July 2017. As a result, the prices of the two products in Tanga region for the month of August 2017 will remain the same as they were in July 2017.

"Furthermore, since there was no new consignment of kerosene received through Tanga Port in the month of July 2017, Operators are advised to source kerosene products from Dar es Salaam and therefore, prices of kerosene for Tanga region will be based on the cost of kerosene products received through Dar es Salaam Port plus cost from Dar es Salaam to Tanga", he said.

The cap prices can be accessed through mobile phones by dialling *152*00# as EWURA reduces prices and then following the provided instructions. This service is free of charge and is available in all mobile phone service providers in the country.

However, oil marketing companies are free to sell their products at a price that gives them a competitive advantage provided that, such price does not exceed the price cap for the relevant product as was computed using the approved formula, which was gazetted through the Government Notice No. 216 published in May 2017.

According to the statement, consumers are encouraged to purchase from stations that sell products at the most competitive prices and offer better services.

It is an offence not to have prices published on boards located in clearly visible places in front of petrol stations and it will attract punitive measures from EWURA.

Retailers must issue receipts printed from an Electronic Fiscal Pump Printer (EFPP) with respect to all sales that they make and consumers are required to demand and keep those receipts that clearly show the name of petrol station, date on which such purchase was made as well as, the type of petroleum product (fuel) and price per litre for every purchase they make.

This can be used as an exhibit in case of a complaint lodged in the event that the selling price is above the cap price or in case the products sold do not meet the approved specifications and also, provide an assurance that appropriate government taxes on petroleum products purchased are fully accounted for recovery from the retailers.

In another development, Tanzania government's recent removal of motor vehicle licence fees that motor vehicle owners were charged every month is said to push up consumption of petroleum products in the country.

The acting Director General of the Petroleum Bulk Procurement Agency, Mr Modestus M. Lumato, said this in Dar es Salaam during the tendering for imports meant for the month of September.

"Most importers slowed down their imports before the budget was read as such there was a reduction of petroleum products in the market. However, there has been an upsurge because imports have increased and the recent removal of the fees (motor vehicle licence) has added to the increase in consumption," he said.

Mr Lumato further said that: "The tenders we are opening also include covering for the shortfall in August thus, there will be two more vessels bringing petroleum products besides the seven tankers that would discharge petrol, diesel and Jet A-1 meant for the month of September."

These tenders like the ones for August are referred to as spot tenders "because they are meant to cover the gap created by orders made for August." Under the PBPA imports are made leaving a month in between before the products are brought into the country.

Thus tenders for deliveries for September have been made just before the end of July. The spot deliveries were won by Sahara Energy Resources Limited that is expected to import 29,200 metric tonnes of petrol at US$74.350 per metric tonne and a total bid price value of US$2.2 million, between August 18 and August 20.

"There were no other bidders for this cargo because the other companies didn't at all submit any bids and these were Addax Energy SA, Trafigura PTE Limited and GBP Tanzania Limited," said Mr Lumato.

Trafigura PTE Limited beat Addax Energy SA to win the other spot tender to deliver 56,600 metric tons of diesel at a premium of US$52.00 per metric ton, thus the total bid price value was US$2.9 million, whereas its competitor's premium was US$54.00, with a total bid price value of US$3.1 million and Sahara Energy Resources didn't bid for this consignment. These products are supposed to be in the country between August 12 and August 14, this year.

According to him, what the tenders were competing for (and usually compete for) is actually the price or costs of bringing in the products. "As PBPA we are conversant with the prevailing prices of petroleum products on the world market due to this fact that the premium they charge to deliver the product to our market is all that matters.

This also includes insurance and other such charges," said the acting DG. Other winners were Addax Energy SA to deliver 85,220 metric tonnes of diesel between September 1st and September 3rd, at a premium of 16.200 per metric tonne, with a total bid value of US$1.4 million, beating Trafigura and Sahara Energy Resources Limited, while Vitol Bahrain EC didn't bid.

Sahara Energy Resources Limited won the tender to import petrol with a bid price value of US$840,613.440 at a premium of US$22.510, during the same period as above.

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