TPDC should leave oil trading business – Muhongo

FORMER Minister for Energy, Prof Sospeter Muhongo has advised Tanzania Petroleum Development Corporation (TPDC) to leave oil trading business and concentrate on oil and gas exploration.

The Musoma Urban legislator said in Parliament on Monday that the state-owned corporation should not abandon its core responsibility of oil and gas exploration and engage in petroleum products business which can be done by anybody.

“TPDC cannot be selling fuel which anybody else can do…It should focus on gas and oil exploration and leave the fuel business,” he said when he was contributing his views on the government budget estimates for 2023/24 financial year.

TPDC launched retail fuel business in 2020 operated by its subsidiary TanOil Investments to help in reducing soaring fuel prices.

TanOil main operations include oil refining and petrochemical projects that aim to add value to petroleum products as well as petroleum filling and service stations, Bulk LPG distribution networks and commercial trading of liquid petroleum products.

It represents government’s interests on behalf of TPDC in all oil-related mid and downstream activities and projects along the petroleum value chain which may include but are not limited to infrastructural development such as refineries, pipelines, supply and distribution of petroleum products.

The government defended its involvement in petroleum products business last year, with Energy Minister, January Makamba saying in Parliament that there was nothing wrong for TPDC to engage in retail fuel business.

Prof Muhongo said TPDC should concentrate on oil and natural gas exploration.

Tanzania has so far discovered natural gas reserves amounting to 57.25 trillion standard cubic feet (TCF) off the coast of Lindi and Mtwara regions.

The government concluded negotiations for the construction of a 40 billion US dollars liquefied natural gas (LNG) terminal with Norway’s Equinor and Britain’s Shell.

Estimated investment of 40 billion US dollars will make the LNG plant by far the biggest project in the country and will have a huge impact around Lindi and Mtwara regions.

A macroeconomic study of the LNG project by Stanbic Bank shows when developed, the project is expected to add to the economy up to 15 billion US dollar (about 35tri/-) annually.

The study report shows the LNG project that comprises a major deep offshore development and construction of a large LNG plant will add between 7.0 billion US dollars and 15 billion US dollars per year.

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