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Engen Petroleum Faces Sanction Over False Oil Report

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by n00b, Jun 17, 2012.

  1. n00b

    n00b JF-Expert Member

    Jun 17, 2012
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    Nilisema wakaja hapa JF wakaponda, sasa yapo wapi?

    By Finnigan Wa Simbeye | Daily News 16, June 2012

    SOME oil marketing companies are reported to frustrate the process of bulk procurement and the government has ordered Petroleum Importation Coordinator (PIC) and Energy and Water Utilities Regulatory Authority (EWURA) to take legal measures against Engen Petroleum Tanzania Limited for violating regulations.

    "The government is becoming impatient with the behaviour of some oil marketing companies such as Engen. We have directed PIC to prosecute Engen while EWURA, as regulators, should also take disciplinary measures against the company," the Deputy Minister for Energy and Minerals, Mr George Simbachawene, told 'Daily News on Saturday' on Friday.

    Mr Simbachawene, who is in charge of the energy sector in the ministry, accused Engen of interfering in PIC and EWURA regulatory roles and raised false alarm over quality of diesel and petrol which arrived by Pacific Opal tanker earlier this week, thus, causing panic.

    "As government, we have respected the Public Private Partnership (PPP) arrangement which established PIC to oversee the process of bulk procurement of petroleum products but some companies are deliberately sabotaging it," Mr Simbachawene said, warning that the ministry would now directly intervene in the process.

    Engen refused to receive diesel and petrol from Pacific Opal which arrived at Dar es Salaam port earlier this week because of what the company described as poor quality commodity after its commissioned surveyor established that the consignment had larger ethanol content.

    "Engen commissioned its own surveyor, tested the oil consignment and went on to announce the results to other stakeholders contrary to regulations," Simbachawene said. Efforts to contact Engen Managing Director, Mr Mubita Akapelwa prove futile yesterday. Under the bulk procurement regulations, the work of testing quality and quantity of imported consignment is done by the Tanzania Bureau of Standards (TBS).

    When Engen decided to undertake its own quality verification, TBS had already issued clearance certificate. "As one of the PIC members and bulk procurement beneficiaries, Engen is entitled to have their own surveyor to test the quality of the commodity," PIC General Manager, Michael Mjinja, said.

    Mr Mjinja said after Engen refused to receive its share of 25,500 litres of diesel and 12,900 litres of petrol from Pacific Opal on allegations that the products were substandard, hence, causing a two days delay in offloading the consignment, a joint team re-tested a sample of the product.

    The joint team which had TBS, EWURA, PIC and SGS International representatives confirmed that the consignment was within locally accepted specifications. "The ship was then allowed to continue offloading the fuel on Thursday," Mjinja said as stakeholders are taking stock of how to settle a 40,000 US dollars (approx. 63.08m/-) bill which the ship had to pay as penalty for two days of delays at the port and the resulting delays to ten other tankers waiting offloading the commodity in the outer anchorage.

    The Swiss based firm, Augusta Energy, has won all the three tenders since bulk procurement was introduced last January, this year. Major oil marketing companies have regularly accused the company of supplying the market with substandard oil but regulators including EWURA and TBS have defended the company as meeting local specifications of the products