Tanzania regulates gas business

Gas05 August 2013, Dodoma – Increased consumption of liquefied petroleum gas, LPG, in Tanzania has prompted the Energy and Water Utilities Regulatory Authority, EWURA, to start regulating LPG business.

According to statistics, consumption of LPG has increased from 4,000 metric tonnes in 2005 to 30,000 metric tonnes in 2013, thus the need to ensure safety in how the gas is imported, stored and distributed.

Over the years, there were no regulations guiding the business. EWURA Commercial Manager (Petroleum), Mr Julius Gashaza said for starters they have introduced new LPG operations rules which will involve the supply chain of the business from wholesalers, super dealers and retailers.

“At the moment the idea is to ensure safety and that customers get their value for money but we also hope that regulating the business may also help to reduce prices in the future and entice more people to use gas domestically,” he said.

The LPG business was handled by one company from 2005 but at the moment there are four companies doing the business while two more companies will soon join in the trade.

“What we have observed is that more and more people find the use of gas at home is safe, affordable and convenient so it is gaining popularity, we can no longer allow the business to continue without being regulated,” he said.

With competition, he added, it will have to be bound by certain rules such as cylinder should be compatible so that customers can easily buy cylinders from any supplier. Other rules that have been introduced include allowing only the wholesaler to have filling plants and the super dealers to have licences for mini-filling plants.

The two should be responsible to assist retailers who shall only be allowed to sell filled cylinders and not fill them themselves. “Wholesalers will be provided with licences to operate storage facilities (depots), properly secured filling plants and a healthy environment, necessary loading and offloading facilities, technical capacity to assist super dealers and weighing machines,” he added.

On the issue of prices, Mr Gashaza said that the authority has not started to set prices for LPG because there is still the need to improve the necessary infrastructure as consumption increases.

“There was a time some years back when there seemed to be a scarcity of gas, consumption was increasing while the infrastructure was not good enough and so we decided to hire a consultant to look into the meter and he did a great job,” he said.

He added that the consultant revealed many bottlenecks that hindered the LPG business in the country, thus the need to promote LPG marketing to attract investors as well because many feared the safety aspect especially on the issue of storage of the gas.

According to Mr Gashaza, LPG is a clean energy that when its use is encouraged in the country, it will help to stop the felling of trees for fuel and thus it provides an avenue to combat climate change and its effects on the country’s economy.

At the moment the authority aims at attracting more investors to go upcountry and reach to as many Tanzanians as possible so that they too can use gas.

– Tanzania Daily News

About the Author