Posted on :Monday , 22nd August 2016

THE government is in plans to widen the scope of companies importing oil in the country in order to create business competitiveness environment that will necessitate reducing the price of oil.

The statement was made here yesterday by the Minister for Energy and Minerals, Prof Sospeter Muhongo when he visited GBP Oil Company in Tanga city.

He said currently the price of oil in Tanzania is still higher in comparison with the price of the same commodity in other neighboring countries despite the fact that they all buy oil from the same world market at the same price.

He said following the research conducted by an expert from the ministry aimed at finding out why the price of oil in the country is higher, they came up with the resolution that the government has been working on it.

According to Prof Muhongo, the finding established that oil price in Tanzania is higher because of the few number of companies which import the commodity, something which reduces the competition in terms of price setting.

"You know in Tanzania we have few oil importing companies... they are four companies only...and if the companies are few, it is easy to collude and set the same price...but if we add more companies to compete, even the price will go down and this is what we have learned from our neighbors," he said.

He further said following such study, the government is now planning to give oil importing licenses to many companies so that they could compete in tendering and ultimately the price of oil will go down.

"I know there are some people who will come up against this plan, but we must continue with our mission because at the end of the day, we want to see wananchi get relief in terms of price reduction...many companies now are welcome to compete," he added.

He also said the plan is going together with the establishment of oil reservoirs in order for the country to have enough oil when there is a shortage of the commodity in the world market.

"Anything may happen that can cause the shortage of oil in the world market, therefore as a country we must have oil reservoirs which can be on standby to help the country during oil crisis period," he stated.

Speaking earlier, the GDP Managing Director, Mr Seif Sudi hailed the government on its decision to use Tanga port as the second port for oil importation, something which has reduced congestion at the Dar es Salaam port.