The first shipment of petroleum products for the long-awaited Strategic Petroleum Reserve (SPR) is expected in Tanzania between the end of this year and early 2015. This shipment will add security of supply to the country’s daily demand of 3.5 million litres of diesel, 2 million litres of petrol and 200 000 litres of kerosene.
Creation of the SPR will help the country cushion itself from both local and global risks which could lead to scarcity of this strategically important product. For this purpose the Petroleum Corporation of Tanzania Petro (PetroTan) has been established to manage the reserve.
It is planned for the initial consignment to arrive in the country by the end of this year or early in January 2015. "At this stage consultations are underway between the company and other stakeholders such as Energy and Water Utilities Regulatory Authority (EWURA)," explained acting Managing Director of Tanzania Petroleum Development Corporation (TPDC), James Andelile.
Discussions are underway as to how the SPR would offload its stock ready for the market. "It should be understood that there would be a need to sell the products after a certain period and these are among the things we are discussing," explained Andelile.
Tanzania faced an acute shortage of petroleum products in the year 2011 when oil marketing companies hoarded fuel stocks after EWURA lowered prices for petroleum products. The country also experienced a fuel crisis during the late 1970s when it was at war with Uganda, as a number of oil marketing companies were reluctant to supply the country with oil.
It is against this backdrop that the creation of SPR is crucial as a fallback position in times of crisis. According to the industry regulator, Tanzania consumes 3.5 million litres of diesel, two million litres of petrol and 200 000 litres of kerosene per day.
At present, the country's reserves, which are stoked by private oil marketing companies, can only sustain consumers for between 10 and 21 days in the event of disrupted supplies.