Tanzania opens up petroleum sector

Nov 15, 2009 01:00 AM

The Tanzania government, through its state-owned Tanzania Petroleum Development Corporation (TPDC), plans to engage in marketing of petroleum products to stabilize prices and provide competition to the private sector.
The move was announced earlier, almost four years since it received parliamentary approval, in a bid to guard against price distortion of the strategic fossil fuels. It was deemed important for the Government to have a hand in the marketing of this strategic product and guard against strangulation because most oil firms are foreign.

The TPDC announcement said it had identified an investment/development opportunity for importation and distribution of petroleum products in and outside Tanzania through its subsidiary "Commercial Petroleum Company of Tanzania" (Copec). The corporation is seeking to enter into a public private partnership with a firm or consortia to exploit the oil marketing trade together. Applicants have been given until December 10th, 2009 to submit their applications for partnering.
The TPDC, whose major duties to date is to participate in the exploration of fossil fuels with oil prospecting firms, and parcelling out oil and natural gas exploration areas to mostly foreign firms, will be joining over 50 other oil marketing companies in the market.

Most exploration firms come from Canada, Australia, UK, Ireland and Brazil. The 50-plus oil marketing firms had until last year been raising prices arbitrarily at petrol pumps before the Energy and Water Utilities Regulatory Authority (EWURA) intervened to propose mandatory maximum price limits in different parts of the country depending on their relative distance from the Dar es Salaam port and the world market.
When the idea of letting TPDC engage in oil marketing was mooted, it was thought the big oil multinational marketing companies were accused of setting up an oil cartel. These oil importers and marketers were said to dictate to smaller ones resulting into uniform price rises of fuel at pumps over night.

Source / East African Business Week
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