TIPER ready to host national strategic petroleum reserve

-face shortage of fuel because importation had been disrupted as they lacked money to place orders.

The Oil Marketing Companies (OMCs) said that the government’s decision to stop an increase of pump prices in September had created a 10bn/- hole in their finances because the fuel was sold a lower prices compared to increased global prices.

The panic was also a result of the harsh reality that consumers learnt for the first time that the nation had only two weeks of petroleum products in stock. As a net importer of petroleum products, Tanzania needs to have a strategic reserve for the product to guard against unforeseeable risks in future including supply chain disruption, war or other similar forces.

It is along such lines that we feel that the government has to make a firm decision to establish the strategic petroleum products reserve. In fact the facility is already there and is partly owned by Treasury.

Tanzania International Petroleum Reserve which was formerly known as Tanzania Italian Petroleum Refinery had enough facilities to host the country’s proposed strategic petroleum reserve for emergency use.

The TIPER facility in Dar es Salaam which is jointly owned by Treasury and Audax Oryx Geneva of Switzerland has capacity to store 254 million litres of petroleum products after heavy investment was made since 2000.

The TIPER tank farm at Kigamboni which changed its function in 1999, when it became a complete storage facility after the refinery was closed down due to financial constraints, had increased its capacity from 140 million in 1999.

In fact decision was already made in 2018 that TIPER be a single receiving point for all petroleum products to also reduce leakages and demurrage charges paid to shipping liners for delays in offloading petroleum products at Dar es Salaam port.

Kigamboni TIPER tank farm stands on a 50 hectares piece of land with direct connections to Kurasini Oil Jetty and Dar es Salaam port’s SPM. In addition to being connected to all oil marketing companies depots for easy transferring of petroleum products, TIPER has also invested in a facility to allow tankers to be loaded with petroleum products right within its backyard.

But by making full use of TIPER tank farm, Treasury will also be making more revenue both in terms of dividend earned as a shareholder but also in terms of reducing revenue loss caused by leakages resulting from discharging petroleum products from oil tankers to depots of various OMCs.   

In his report in 2016/17, Controller and Auditor General advised in a report that TIPER be turned into a single receiving facility for all petroleum products imported into the country to save the nation demurrage charges which are paid to shipping liners for offloading delays at the port.

The CAG said the country pays up to U$25,000 per day in delaying charges to oil tanker owners per day in demurrage charges, something which can be avoided if the decision to have a single receiving point is enforced.