Tanzania’s minister for Industry, Trade and Investments, Charles Mwijage, stated that his country is examining the possibility of building an oil-trading hub in Tanga to supply fuel to east and central African regions in DR Congo, Burundi and Rwanda as well as other neighboring countries, All Africa reported.
Mwijage added that Tanga has a great potential to become a major oil trading hub in east Africa due to its strategic geographical positioning with deep sea ports, ample areas for construction of storage tanks, and railway connections.
He concluded that an oil-trading hub in Tanzania would enable the government to establish bonded or floating stocks as strategic reserves, which may influence price movement in favour of the country, according to the Daily News.
Furthermore, the strategically positioned hub would help cut back on freight charges for oil transportation from the source market, as large crude carriers could anchor and filter oil products into other tankers in a ship-to-ship (STS) transfer or transfer to storage tanks.
In July, Uganda chose Tanga to export its crude oil, via a $3.5b pipeline, after a report found Tanzania to be a cheaper and more secure option than Kenya.