Tanzania petroleum industry in a confused stare

THERE is confusion in Tanzania’s petroleum industry following a recent decision by the state-run Petroleum Bulk Procurement Agency (PBPA) to reinstate a Nigerian oil trader to import the item under the Bulk Procurement System (BPS). The troubled firm, Sahara Energy Resources DMCC, has been at loggerhead with authorities over importation of sub-standard petroleum products twice in less than six months, making it an offence under the Petroleum Act, 2015 and its legislation. The legislation clearly states that any supplier who supplies a petroleum product that is not in conformity with approved specifications shall be blacklisted and shall not be eligible to bid for importation of petroleum products into Tanzania for a period of not less than six months and not more than five years. While the legislation is crystal clear, Sahara Energy had acted ‘with impunity’ as it has not been penalised over the unlawful activity. Records still ring on oil marketing companies that Sahara was at first suspended to offload over 37,000 metric tonnes of sub-standard petrol at the Dar es Salaam port after winning a tender last December, to supply the country petroleum product through February. The most recent was in May when the same firm was granted contract by the same agency, just to import contaminated Jet A-1 fuel, irking Energy and Minerals Minister, Prof Sospeter Muhongo. Fresh details gathered by this newspaper shows that the agency had made a U-turn by reinstating the troubled firm to continue taking part in BPS tenders. According to the letter signed by PBPA Acting Executive Director, Mr Michael Mjinja, dated July 26 to Managing Director of Sahara Energy Resource DMCC and seen by the ‘Daily News’, the former allowed the firm after reports that it had evacuated contaminated JET A1 ad cleaned all tanks and pipelines. “Your commitment to adhere to the Tanzanian laws, rules and regulations and cooperate with the government … therefore, the agency had decided to reinstate you to participate on BPS tenders,” read part of the letter. Mr Mjinja admitted when contacted yesterday knowledge of the letter but remained tight-lipped on why the agency did not take legal measures against the troubled firm. Energy and Water Utility Regulatory Authority (EWURA) immediately said it had written to PBPA an order demanding the agency to explain on the regulations faults. “We have written them (PBPA) an order seeking clarification over the faults. EWURA has also directed the agency to withdraw its directives to the Nigeria-based firm, allowing it to take part in BPS tendering,” EWURA Corporate and Public Affairs Manager Titus Kaguo said. Mr Kaguo went on to note that the regulator had acted as a quasijudicial entity in issuing the order, warning that should the agency fail to adhere to it, it shall be subjected to serious legal action. A senior official in the Ministry of Energy and Minerals told the ‘Daily News’ that the agency had failed to abide by the government laws implying a cocktail of reasons behind such malpractice. “It’s either the agency had pocketed some bribes to give Sahara energy a green light,” she said on condition of anonymity calling on for serious investigations into the matter. Mr Mjinja, however, declined receiving any letter from the regulator. He advised the reporter who was earlier granted appointment to write down the questions on the matter for him to respond at his ‘reasonable time’. Observers in the oil industry rushed to question why the authority had not implemented the 2015 law against the defaulting oil company. Section 171 states that any person who contravenes any provision under this super part commit an offence and shall be liable on conviction to a fine not less than 5m/- or 20 per cent of the value of the total consignment, whichever amount is greater or imprisonment for a term not less than two years or both.