Oil marketing companies are accused of massive theft of bulk procured oil occasioning the country losses to the tune of 18bn/- annually.
The allegation was published in a report conducted last year and submitted to the Energy and Minerals ministry. It was commissioned and produced by the Petroleum Importation Coordinator (PIC Ltd) Special Committee of Oil Marketing Companies and Stakeholders under the Bulk Oil Procurement System (BPS).
“Under the BPS, importers declare smaller amounts of fuel than the actual imported quantity,” the report alleges.
Availed to media yesterday, the report, which was meant to establish causes of fuel losses and solution for the same says, through BPS up to 30 firms import oil but each has its own storage facilities which allows them room to under-declare.“The importers blame things like leakages when offloading from ships to the tanks and evaporation at the reservoirs,” the report explains.
“This is because even though they import together, they each offload their shares to their individual storage tanks,” it details.
The report says as much as there is evaporation and other leakages during various processes, what the importers claim to have lost are substantially higher than the internationally accepted amounts.
The report warns that; “This kind of cheating has an impact on the fuel pricing due to the fact that the prices are calculated based on the total costs incurred during importation of fuel.”
“It is the final consumer who ends up suffering, paying for the miraculously lost fuel,” the report further cautions and adds “…the lost fuel dubiously finds its way to the market and that way, the Tanzania Revenue Authority also ends up collecting less revenue than expected.”
However, the report also says that losses have reduced slightly but still remain high costing the industry and ultimately the end user.
The report also cited that new pipe work and manifolds have been installed without proper planning, storage tanks at some terminals are not calibrated accurately and have malfunctioning valves and even those with proper valves are mishandled.
“Most of the valves connected in the discharge system of the terminals are loose causing leakage of oil which in turn leads to a loophole for the firms to steal,” it warns.
The report has further revealed incidences of ineffective safety and security measures that have also contributed significantly to huge losses of the product.
The report has suggested several recommendations to improve the BPS under the Petroleum Importation Coordinator, one being to
emulate the Kenyan system whereby there is only one petroleum storage, discharge and distribution system.
“This will assist Tanzania Revenue Authority to collect the correct revenues and taxes from fuel,” it says.
Also, the committee recommends that stakeholders have to establish a joint security company and that a joint agreement between Tanzania Ports Authority (TPA) and Tanzania and Italian Petroleum Refining Company (TIPER) on the security and operations of storage and pipeline system should be reached.
Other recommendations include, installation of electronic monitoring system for entire pipeline system which can be shared by oil marketing companies, TPA and TIPER.
“PIC must appoint a consultant to audit performance of inspectors and terminals,” it advices.
It says PIC must arrange training on petroleum losses and the Energy and Water Regulatory Authority (EWURA) should deploy a consultant for a proper layout of BPS infrastructure.
The special recommendation was also put to Weights and Measure Agency (WMA) that they should not calibrate and verify tanks, but they should remain as verifiers.
According to the report, the WMA recommendations were put forward because several tanks were found without calibration allowing for inaccurate measurements.
It also called the Ministry of Energy to fasten the reviewing of its recommendations in order to improve the efficiency of fuel importation.
SOURCE: THE GUARDIAN
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