Energy and Water Utilities Regulatory Authority (Ewura) said yesterday the tug of war among oil dealers over a consignment of allegedly contaminated fuel has ended, promising to release the sample test results next week.
The authority’s director general, Haruna Masebu, speaking to The Guardian in an interview yesterday on the issue said the controversy has been contained.
“The results of the fuel samples taken to the Chief Chemist (for testing) will be ready next week,” Masebu said.
He said three types of samples were taken the Chief Chemist. There was sample from a filling station, while another was submitted by PIC to Tanzania Bureau of Standards (TBS) and yet another sample was taken from the suppliers, he said.
It was not easy for Ewura which represents the government to intervene in the business between Augusta and PIC because the entire process remains contractual, he said.
“PIC is the buyer and Augusta is the seller and these things are contractual. They will ask Ewura why we are infringing on their legal businesses,” Masebu said, adding: “We are not part of the contract.”
He, however, explained that so far nothing has gone wrong in the fuel business in the country, assuring consumers that as the regulator, EWURA was working on the issue.
The bulk importer in response to complaints by Taomac that it was importing substandard oil, said last week that it has always supplied certificate of quality (COQ) at loading ports for all the cargos discharged at Dar es Salaam port.
Speaking from Geneva, Switzerland, in a letter dated April 11, this year, Augusta Energy SA managing director Giuseppe Nestola said his company has been doing so from December 2011 to date.
“For the sake of good order we have presented to PIC, Ewura, and all receivers the COQs of vessels supplied so far. The Tanzania Bureau of Standards (TBS) demands and inspects COQs before allowing vessels to discharge cargo at Dar es Salaam port,” he noted.
Early this year, a saga between the oil importers cropped up after Augusta Energy SA was awarded a second tender to supply bulk oil up to June this year.
Initially it was only underground, but the friction between the antagonistic groups came to the surface last month when companies openly began accusing each other over imported sub standard oil.
In a letter dated April 11, this year, Nestola wrote PIC chairman Shanif Hirani, Ewura director general Masebu, Taomac executive director Salum Bisarara in response to their written complaints that the imported oil did not meet quality standards.
Saying Augusta Energy SA hesitated to reply since it had not received any formal complaint from PIC which is the contractual counterpart in the Shipping and Supply Agreement for Tenders I & II, Nestola wrote: “However we felt the need to protect our image and reputation due to the very high level of confusion that has transpired from the said letter and the serious allegations that are contained in it.”
Godfrey Fernandes GAPCO Tanzania Limited Group Chief executive wrote to Augusta Energy SA referring to quality of PMS supplied in Tanzania before December 2011, saying RIL/Gapco has not supplied ethanol blended PMS in the local market as the same is not allowed by the policy and that according to their understanding, marketing of ethanol blended PMS requires a Government Gazette notification as the industry has to upgrade the respective infrastructure to receive, store and sell the product.
“To the best of our understanding the mention of ethanol in footnote of TBS specification is only an explanatory input and does not mandate use of ethanol as an oxygenate in PMS for sale in Tanzania,” he noted.
He added: “We have suffered heavy losses and loss of image and shall be registering our claim separately. We reserve our rights and contentions as deemed appropriate.”
Augusta Energy SA responded to Gapco, saying: “We know that your parent company Reliance Refinery produces both oxygenated and oxy-free gasoline and assumed that you had imported oxygenated gasoline in the past.”
He said further that his company will investigate the matter.
“However we can confirm that other companies listed in our mail have imported oxygenated gasoline in the past since we bought cargoes from them and we can read a COQ,” he noted, directing Gapco to go through TBS specifications of 2006 and 2009 in which it is clear that ethanol (or other oxygenates) are allowed.
Nestola said further that all the mogas cargoes, but one, supplied under the Tender I & II contain a maximum 3.7 percent in weight of oxygenates (which includes ethanol) as allowed by the Tanzania specification of gasoline published by TBS and in accordance with PIC contracts.
“For the avoidance of doubts please also note that many of the cargoes supplied prior to December 2011 by the regular suppliers to Tanzania, including ourselves or Addax/Oryx, or Trafigura (and previously BP)/Puma or Reliance/Gapco contained oxygenates, which is more economical and completely in line with Tanzania specifications,” he said.
“Therefore the only measure to be undertaken is to reduce or eliminate the presence of water in the gasoline depots, tanks, road-trucks or rail-wagons and petro-stations,” he explained.
Augusta Energy won three PIC international open tenders and is supplying oil at what is said to be the cheapest available price.
“We estimate at approximately USD20 per MT the discount of oxygenated gasoline versus non-oxygenated gasoline,” Nestola said.
From December 2011 under tender I and tender II Augusta Energy supplied approximately 345 million litres which is equivalent to 10,000 trucks of gasoline.
He said: “For two pumps that failed in Sumbawanga, or three trucks with off-specification mogas in Bujumbura, one car that stopped in Kinondoni or 500 litres rejected in Babati --- the quantities involved are so small in the scheme of what we have supplied that the obvious inference is that the cause of those problems is elsewhere.”