Oil firms rob Tanzanians of Sh18bn yearly: report

A filling station attendant refuels a motorist’s vehicle at a Dar es Salaam outlet. Tanzanian consumers wonder why they are experiencing no relief in buying a product whose price in the world market has fallen by 40 per cent. Ewura says prices might go down effective February. PHOTO | FILE 

By Ludger Kasumuni,The Citizen Reporter

In Summary

• A pipeline linked with vessels to many terminals provides loopholes for thieves, according to a new report
• In this situation, the loser is none other than the end user, that is, the consumer of oil who has to bear the burden of the huge losses, the report points out
• 2.6 Amount in percentage of oil losses that some vessels have suffered,  which is far beyond acceptable level
• Sh51bn Amount of money Tanzania lost between Dec. 2011 and Nov. 2014,  through the ‘‘disapearance’’ of 30,000 metric tonnes of fuel

Dar es Salaam. Oil marketing companies have been stealing imported petroleum products worth Sh18 billion annually, according to a stakeholders’ report.

The report, which was released on Friday by a Special Committee of Oil Marketing Companies and Stakeholders under the Bulk Oil Procurement System (BPS), shows that there are three areas where theft takes place, one being from the vessels themselves.

The pipeline system also provides an opening for oil thieves to operate. And then, the pipeline is linked with vessels to many terminals and storage terminals which avail loopholes for thieves.

In this trend, the loser is none  other than the end user, that is, the consumer of oil who has to bear the burden of the huge losses, the report points out.

From the study carried out by a committee set up by Petroleum Importation Coordinator (PIC) Ltd, it has been established that between December 2011 and November 2014,  Tanzanians incurred a loss of 30,000 metric tonnes of fuel worth $28 million (Sh51 billion).

“The government began to implement the BPS in 2011 in order to improve import system.  It is true vessel waiting time has been cut down significantly, reducing demurrage costs while premiums have also come down.  Losses have been reduced slightly but the end user continues to pay dearly.

Some vessels have suffered losses of 2.6 per cent of their oil, which is a way over the acceptable level,” reads the report, adding:

“New pipework and manifolds have been installed without proper planning. Storage tanks at some terminals are not calibrated accurately and have malfunctioning valves.”

The report also shows that most of the valves connected with the discharge system of the terminals are loose, causing leakage of oil and regular discharges of water that in turn cause theft of petroleum.

The report further reveals incidences of ineffective safety and security that have contributed significantly to huge losses of petroleum.

The monthly templates of the Energy and Water Utilities Regulatory Authority (Ewura), according to the report, do not reflect the true value because of such huge losses.

The report gives several recommendations to improve the BPS under the Petroleum Importation Coordinator, one being to emulate the Kenyan system; whereby there is a single petroleum storage, discharge and distribution system.