Local News

Importation of poor quality petrol scrutinized

THE managements of Petroleum Importation Coordinator (PIC) and the Tanzania Bureau of Standards (TBS) are expected to meet today to deliberate on poor quality petrol supplied by Augusta Energy SA through bulk procurement system (BPS) between January and March, this year. 

"We will be meeting with TBS tomorrow (today) in which PIC expects to get a report from TBS on what transpired during the importation of the disputed oil," PIC General Manager, Mr Michael Mjinja told Daily News in a telephone interview on Sunday.

Adding; "It is after we meet TBS that we would advise the PIC board of directors on the way forward. We are optimistic of reaching a decision by Wednesday this week. The Energy and Water Utilities Regulatory Authority (EWURA) recently ordered PIC to take actions on poor quality petrol supplied during the period.

EWURA made the directive in a letter dated June 5, 2012, which has been seen by Daily News, addressed to the PIC General Manager and copied to the Permanent Secretary in the Ministry of Energy and Minerals.

The authority is of a view that since the relationship between the supplier and PIC is purely contractual, the PIC should exercise its contractual rights under the Shipping and Supply contract," said a letter addressed to the PIC which was signed by EWURA Director General, Mr Haruna Masebu.

It followed confirmation by the Government Chemist Laboratory Agency (CGCA) recently that petrol supplied during the period contained ethanol higher than the Tanzania Bureau of Standards (TBS) specification of 9.5 per cent.

Oil marketing companies had in April this year, accused Augusta Energy SA, the supplier of petroleum products through BPS, over poor quality petrol supplied between January and March. The Geneva-based Augusta Energy SA won three successive tenders to supply oil through BPS from January to June, this year, with each tender covering two months.

Following complaints by oil marketing companies last April, EWURA intervened in the matter by collecting oil samples from various sources and forwarded them to the CGLA for quality analysis. Laboratory reports of the said analysis showed that the products contained ethanol higher than the TBS specification of 9.5 per cent, according to the letter.

It was then decided to test samples for all gasoline (petrol) vessels that berthed at Dar es Salaam port during the above mentioned period which were taken from 11 ships, to the government chemist for laboratory analysis.

"The results of the analysis conducted by the chemist show that out of the 11 samples that were analyzed, 10 had ethanol content which was above the level that is specified in the TBS standard,"  the letter reads in part.

Adding; However, PIC is cautioned that in whatever action that you will take, you should take into account that suppliers were done under CIF (cost, insurance and freight) contract and the need to ensure the continued supply of petroleum products.

It also came to light that TBS conducts only 11 tests against required 17 tests on imported oil and thus created a loophole for importation of poor quality oil. Augusta Energy Managing Director, Giuseppe Nestola, has in the past maintained that the disputed fuel had legally acceptable levels of oxygen content which many oil marketing companies imported prior to commencement of bulk procurement.