20110813
Reuters
DAR ES SALAAM (Reuters) - Tanzania BP, an oil trading joint venture owned by the government and a subsidiary of commodity trader Trafigura, has been suspended from selling fuel for three months after refusing to do so because of a fall in oil prices, the energy regulator said.

It also said the firm's chairman and chief executive should be prosecuted for ignoring to comply with an order issued by the regulator on Tuesday asking all licensed oil companies to resume selling oil.

Most private oil retailers last week halted distribution of fuel after the energy regulator lowered fuel prices.

That followed a government pledge in its 2011/12 budget in June to cut prices to tackle the rising cost of living.

"All petrol stations with the BP logo are prohibited from buying fuel from other wholesalers and selling it at their outlets," said Haruna Masebu, director-general of the Energy and Water Utilities Regulatory Authority (EWURA).

Tanzania BP is allowed to sell jet fuel and other petroleum products but not petrol, diesel and kerosene during the suspension, it said in a statement.

"The (EWURA) board of directors has instructed that the chief executive and chairman of BP (Tanzania) Limited should be taken to court by the Director of Public Prosecutions (DPP)," said Masebu.

Tanzania BP could not immediately be reached for a comment.

The energy regulator said it has issued a warning to three other oil marketing companies -- Engen, Oilcom and Camel Oil -- that had refused to sell fuel.

Most oil retailers last week halted selling fuel, causing long petrol lines across the country.

Energy and Minerals Minister William Ngeleja told parliament on Tuesday the energy regulator had licenced a state-run oil marketing firm to import and distribute petroleum products for the first time since 2000 to help end the fuel shortage.

Ngeleja also said fuel retailers had written to him rejecting the maximum price cap set by the regulator, arguing that the formula used to determine prices was flawed and squeezed their profit margins.

Tanzania BP is a 50-50 joint venture between the government and Trafigura unit Puma Energy, which bought its stake from London-based BP Plc.