Emirates, Saudi Arabia toestablish major petroleum hub in Tanzania

01Nov 2021
Marc Nkwame
Arusha
Financial Times
Emirates, Saudi Arabia toestablish major petroleum hub in Tanzania

Middle-eastern countries, UAE and Saudi Arabia, have agreed to establish a giant petroleum hub in Dar es Salaam an ambitious projects that will see Tanzania becoming a major supplier of oil to eastern African countries.

Minister for Energy, January Makamba.

The proposed gas hub planned for Tanzania’s commercial capital will accommodate an oil refinery to process crude oil into various petroleum products and manufacturing plants.

The hub will be getting consignments directly from the Middle East and ensuring that the country is self-sufficient in domestic fuel supplies and having surplus for export.

Minister for Energy, January Makamba explained that the ambitious developments follow the successful trip of delegates from Tanzania to Algeria, Saudi Arabia and United Arab Emirates, a mission aimed at finding ways of cutting down fuel prices in the country as well as keeping pump prices low and stable.

The crude oil hub and refinery will guarantee security of supply for Tanzania and solve the long existing fluctuating gas prices in the country once and for all.

 “Global fuel prices have been on the rise in recent months with Tanzania suffering the consequences, prompting President Samia Suluhu Hassan to issue directives for my ministry to address the problem promptly,” Energy Minister Makamba pointed out while addressing a Press Conference in Arusha.

 “The first option for us was to start importing petroleum fuels directly from refineries in the source countries, eliminating middle agents,” the Energy Minister explained, adding that the move has enabled to slash costs previously topped by middlemen.

In October, the state firm, Tanzania Petroleum Development Company (TPDC) won the tender to import diesel and as result, Tanzania only paid US $30 per barrel of crude oil when global prices stood at US $73 per barrel in August.

As worldwide crude oil prices escalated to US $86 per barrel in October, the TPDC, according to the minister, managed to import Diesel at the cost of US $20 per such container.

While his delegation visited Algeria and the Middle-East, they held official meetings with Energy Ministers in Algeria, Emirates and Saudi Arabia with plans to hatch mutual trade cooperation with Tanzania, including reinforcing the latter’s position in directly procuring oil from the source countries.

Makamba was accompanied by the Commissioner for Petroleum and Gas, in the Ministry of Energy, Michael Mjinja and the executive director for TPDC, James Mataragio.

Tanzania, through the Ministry of Energy also focuses on ‘bulk procurement system, as well as initiating strategic national petroleum reserves to ensure that the country has fuel storage to last at least 90 days, instead of the current situation when the reserve was only able to hold up for just 15 days.