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The effect of competition on the performance of oil companies in Tanzania
(University of Dar es Salaam, 2004) Makale, Nyawetaka
Major oil companies in Tanzania, especially those, which were established long before the oil industry was deregulated in 1999 found out they were performing badly in the liberalization era and blamed competition as the cause of their underperformance. New oil companies emerged as a result of liberalization of the oil industry in the country. TOTAL, BP and ORYX, the longest serving oil companies in the country were on the brink of being closed down, the management of these companies formulated several strategies to reposition their businesses but to no avail. Sales volumes continued to go down year after year. The aim of this study was to find out the effect of competition on the performance of the oil companies in Tanzania. Three hypotheses were formulated and all of them were confirmed. The conclusion drawn is that the performance of oil companies in Tanzania is governed by different prices set by the companies, credit terms extended to customers, service quality provided though not very prevalent factor, and relationship between customers and the companies. Competition has brought awareness of the operations of the oil companies to the public, as they are now aware of the quality and price of fuel offered to them. It was recommended that the government establish a regulatory body to monitor the operations of the oil companies in the country.