PETROLEUM BULK PROCUREMENT AGENCY SEEKS PERMISSION FROM EWURA TO INCREASE FEES FOR OIL MARKETING COMPANIES

Tanzania’s Petroleum Bulk Procurement Agency (PBPA) is in a fresh move that will see oil marketing companies help plug a Tshs 2.2 billion budget deficit for the 2017/18 financial year.

The Agency is seeking permission from the Energy and Water Utilities Regulatory Authority (Ewura) to raise oil marketers’ fees from Tshs0.50 to Tshs3 per litre.

Ewura said it had received the proposal. “Upon review of the application and stakeholders’ comments, Ewura will submit the recommended fees to the Minister of Energy,” Ewura’s acting director general, Godwin Samwel said.

PBPA was collecting and collating the views of the Government Consultative Council, Ewura Consumers Consultative Council, and other groups, prior to a public hearing in Dar es Salaam on August 30.

The petroleum agency (PBPA), set up in 2015, took over the activities of the Petroleum Importation Co-ordinator Ltd in January 2016, to oversee importation of refined fuel through the Bulk Procurement System in a competitive bidding process.

The petroleum importer is funded through various sources, including oil marketers’ fees at a rate of Tshs0.50 per litre.

The income will be generated from marketing firms’ fees, pre-qualification fees, tender participation fees, membership joining or renewal fees and penalties for late opening of letter of credits.

The fee payable at the current rate of Tshs0.50 is estimated to contribute Tshs2.4 billion ($10.7 million) to the annual budget for 2017/18 while other sources will contribute about Tshs1.3 billion ($5.8 million).

Kenya's foreign currency reserves progressively fell by over $800 million during the past three months, the period within which the general elections were held, and the Central Bank fought to stave off wild swings by the shilling.

Two weeks ago, CBK’s forex reserves stood at $7.42 billion, equivalent to 4.93 months of import cover, compared with $8.23 billion, equivalent of 5.48 months’ cover three months ago.

The forex reserves have been heading towards the minimum four-month import cover, stipulated in the law.