A bulk tank and kerosene-can filling plant was established in 1901, and for a while Zanzibar supplied the oil needs of much of the east coast of Africa and the Indian Ocean islands. Shell expanded to the mainland and, with the formation of the Consolidated Petroleum Corporation in the late 1920s, BP acquired an interest in the company. In 1970 the Government of Tanzania bought a 50% interest in what was then Shell and BP Tanzania Limited. In March 1982, BP bought out Shell's interest and the company became BP Tanzania Limited.
Today BP's commercial customers include Portland Cement, Coca-Cola, the breweries, sisal and wattle estates, the cotton industry, shipping and the spice trade in Zanzibar. BP supplies the Trans Africa Railways Corporation Ltd and a number of transport operations and construction companies. The company has a 38% market share and, since market liberalisation in 2000, it can offer its own prices at the fuel pumps. In the retail or service station sector, BP Tanzania holds approximately 35% market share. It holds about 35% in the commercial sector and 70% in aviation.
Until July 1997 the Tanzania Petroleum Development Corporation (TPDC) imported 70% of the main products on behalf of the government and sold these to the oil marketing companies. The remaining 30% was produced locally by the TIPER refinery. In July 1997 the industry was partially liberalised, allowing oil marketing companies to import fuels through a ministerial Technical Task Force which floated tenders amongst the oil marketing companies. The successful company could import fuel on behalf of other oil companies.
The Oil marketing companies are now allowed to import any product they need to service their customers. A system exists whereby importers can share their imports with the smaller oil marketing companies. This system also helps small companies and new entrants to the market. Following the amendment to the Petroleum Act in January 2000, the Technical Task Force has been given the role of Interim Regulator for the Petroleum Sector until such time as new legislation is adopted.
BP Tanzania is among some 40 oil marketing and trading companies in Tanzania with Total, Oryx, Engen, GAPCO, GAPOIL and Oilcom Tanzania Limited being the leading ones. Last year, BP Tanzania embarked on a re-basing exercise when it reassessed its customer base to reduce debts and focus on growth. It is now moving away from being volume driven to being profit driven by investing in existing sites, rationalising service stations and focusing on major towns. In three years, the company intends to be the market leader, not in terms of volume, but in terms of its customer offer. BP is also looking into convenience stores at its service stations. One store has opened in Dar es Salaam, with two to follow shortly. The company is improving its network of sites in Dar es Salaam and Arusha through new sites, raze and rebuilds, as well as site upgrades.
Air BP is the sole supplier to most of the airports in Tanzania except for Dar es Salaam. The new Jet A1 facility on Zanzibar Island has already exceeded expectations due to the booming tourist market. In Dar Es Salaam Air BP has 75% of the market share in aviation fuels and in Zanzibar 100%. It recently signed a supply deal with Oman Air which does three flights a week.
Part of BP's business is transit trade: bringing products into the port of Dar es Salaam and then through the country to Uganda, Rwanda, Burundi, the former Zaire, Zambia and Malawi. BP Tanzania markets a diverse range of automotive and industrial lubricants as well as a newly introduced range of detergents and speciality products. Most of the major, fast-moving grades of lubricants are blended at the Oryx LOBP situated in Dar es Salaam. Specialities, slow moving grades and the detergent ranges are presently imported from a number of BP associate plants around the world such as Singapore, Dubai, Durban and Harare.
LPG has been in the Tanzania market for over forty years. BP monopolised the market - which relied on LPG imports - until Agip entered after the construction of the local refinery, Tipper, in 1964. Now BP and Agip Tanzania Limited (which has since been sold to ADDAX and operates as Oryx Tanzania Limited) are the only leading players.
BP Tanzania has a solar sales organisation dealing with the marketing and installation of solar photo-voltaic systems and has been in the Tanzanian market for about eleven years. Based in Dar es Salaam, BP Solar's coverage of the up-country has been through the distribution network already created by BP Tanzania.