PIC suspends Addax Energy for breaching bulk oil contract deal

THE Management of the Petroleum Importation Coordinator (PIC) through its tendering committee has suspended the Geneva based Addax Energy SA from participating in its incoming four tender bids on bulk oil purchases organized by the firm under Bulk Procurement System (BPS) with effect from the month of February this year, it has been learnt. PIC General Manager Michael Mjinja said recently in an exclusive interview yesterday in Dar es Salaam shortly after a press conference that, the decision for suspension is after it was found guilty of violation of regulations and rules set by PIC that governs BPS importation system. He said the decision by the PIC management is to stick to the rules and regulations governing petroleum importation procedures and that it would not hesitate to take disciplinary legal actions against the offenders who want to attempt to bend the contractual procedures for their own benefits. He said the oil importing company had committed the offense in its two previous oil marketing tender bid which it won last year for the 5th and 6th respectively, and in its last tender the Tanzania Bureau of Standards (TBS) rejected the oil cargo consignment it had ordered from being offloaded at Dar es Salaam port. Narrating the incident, Mjinja noted that when TBS officials who work in collaboration with other quality certifying companies at the Dar port such as the Independence Survey Ltd, discovered that the consignment did not conform to the required quality standards sent a letter to PIC for confirmation. In view of this, together with this suspension, he also noted that, his office has also taken legal measures over the issue as per the contract and ordered the company to return the fresh bulk alongside with the extra payment of $ 0.5 to be charged as fine in addition to every metric tons ordered which in total was 100,000 tons. However, he said the decision by the PIC management is to stick to the rules and regulations governing petroleum importation procedures and that it would not hesitate to take disciplinary legal actions against the offenders who want to attempt to bend the contractual procedures for their own benefits. This is the second time PIC is suspending the oil importing company. It can be remembered that, in early December 2012, PIC issued a suspension order that prevented the company from participating in its one oil tender market for what it had termed as due to violation of regulations under which the multinational company is said to have delayed delivery during the fourth tender an aspect that such delays might result into serious shortage of Petroleum products in the country. Meanwhile, a local Oil Marketing company -Gapco Tanzania Ltd, has won the 9th bulk procurement tender for the supply of fuel in the country scheduled for the month of March this year. This is the second time the company wins such a tender which it had competed with other six oil marketing companies operating in the country who submitted their tender bids. The companies which had participated by btakking tender documents and later submitted are Augusta Energy SA, Enoc Africa Limited, Glencore energy UK Ltd, Gunvor SA, Vitol SA Switzerland and Sahara Energy Resources DMCC. The General Manager for PIC Michael Mjinja told a press conference yesterday in Dar es Salaam that, out of the six competing companies, Gapco had the minimum weighted average premium of 46.506 while the maximum was 56.034. He said that, the initial tender was opened end of January 2013 and was definitely cancelled due to irregularities found in the bidding documents. However, he added that, the process for the 9thn BPS was repeated on Monday this week after ascertaining petroleum stock levels in the country. However, he has dismissed claims that either there were some sorts of forgery made on the documents when require clarifying reasons for the cancelation but noted that, oil marketing companies were given opportunity to re-work on their requirements following change of delivery period. Describing the various challenges facing the PIC, he said that, his company is worried to see how the premiums keeps of declining and noted that, they only prefer to take those ones whose weight average has the lowest price level. Other challenges he noted is based on the storage capacity which he said is not enough and that his organization is currently working on the issue to see that such a problem comes to an end. Statistics made available shows that, it’s estimated that Tanzania uses a total of 2 million litres of petrol, 3.9 litres of diesel, 550,000 litres of oil jet and 190,000 litres of kerosene per day.