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KOJ discharge delays fuel oil shortages

The reasons given were that the oil’s discharge at the Kurasini Oil Jet (KOJ) had to give room to tankers carrying transit, heavy furnace oil (HFO) and fuel for power generation.

The shortages were bound to occur since KOJ has been designed to handle vessels carrying less than 50,000 metric tonnes and could not support the current needs of the country and its landlocked neighbours.

The country is currently estimated to consume 350,000 metric tonnes of fuel per month out of which 65 per cent is diesel, 25 per cent petrol and 10 per cent kerosene and Jet A fuel. Going by statistics, seven tankers need to call KOJ to suffice the country’s need per month and this is its maximum capacity, depending with the nature of the cargo.

There is no room for other consignments. But, because the KOJ problem is known, there was no reason to encounter shortages as tankers are scheduled to berth according to their calling to Dar Port and priority status, based on the nature of their consignments.

Once oil supply chain is disturbed, it takes between one to two weeks to return the market at equilibrium. During this period, the economy and citizens face the brunt of high prices and time lost for searching of the ‘black gold.’

Energy component is the second heaviest variable on calculating inflation rate, which at the moment stands at 14.7 per cent. And it won’t be a surprise should the October rate fail to go down as prices of fuel in Mbeya, Iringa, Ruvuma, Kilimanjaro and Rukwa have skyrocketed.

High inflation is bad for the economy because it erodes the purchasing power, thus lowering aggregate demand to impact negatively on the manufacturers’ output while at the end of the day it lowers government revenues.

It’s a vicious cycle. Authorities concerned should make sure there is ample supply of oil and an increase in stocks to maintain the market equilibrium, thus protecting macro-economic fundamentals.

The good thing is that the Single Mooring Point (SMP) project, according to available information, is scheduled to start receiving consignments early next month. This will increase deliverability and eliminate queuing at the KOJ. Yet it was long, long overdue!

TANZANIA has sustained relatively high economic growth ...

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Author: EDITOR

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