Modestus Lumato, the director general for the Energy and Water Regulatory Authority (EWURA) made the remarks at a press conference over the weekend, defending the petroleum bulk procurement system which is facing scrutiny and complaints from various stakeholders.
He said that the Petroleum Bulk Procurement Agency (PBPA) plays an important role as it coordinates bulk procurement, where companies compete for lowest price procurement and the company winning the tender imports all petroleum products, helping the government to monitor the flow and pricing of fuel.
He cited n complaints from various stakeholders demanding a review of the bulk procurement system (BPS), arguing that things could have been worse for fuel availability countrywide with the old system where any company could import petroleum products and sell on its own.
Advantages of bulk procurement include non-tampering with the fuel products as the government is aware amount ordered and what each fuel wholesaler obtains from the arriving consignment, recalling that earlier the Tanzania Petroleum Development Cooperation (TPDC) imported petroleum products but an outcry among the business community led to the system being cancelled.
Any company could then import petroleum products but the results were unsatisfactory, thus the government decided to introduce bulk importation for better outcomes, he stated, noting that inability to monitor fuel flows and the pricing limited policy action for the authorities.
When a bulk consignment arrives, the fuel is distributed to oil companies that placed orders in the consignment, he stated, urging singularly that media outlets need to “help the government to educate the general public on how this system has helped the assurance of petroleum products availability in our country compared to past experience.”
Rejecting accusations of corruption in bulk procurement, he said no one can win the tender without meeting the required conditions as transparency is assured during tender opening and awarding.
All tender documents are submitted a few minutes before the deadline of the submission to avoid conspiracy and they are all opened in the presence of all oil companies’ representatives to avoid such complaints from the losers, he specified.
Bulk procurement came up in January 2012, setting up a database on consumption trends and sources of importation to get the best price on the world market and guarantee quality of imported products, he added.
Observers noted that the matter was discussed in the legislature during the budget session, and it was decided to keep bulk procurement, but companies that can find lower purchase sources be free to do so.
