Impact of Bulk Procurement System (BPS) and Price Regulation on Profitability of Oil Marketing Companies in Tanzania

Abstract

The study analyses the impact of price regulation and bulk procurement system (BPS) on the profitability of oil marketing companies (OMCs). Secondary data from audited financial statements and management reports were used. The study concluded that introduction of price control and BPS slightly reduced the profit of OMCs. However, it stabilize the price and ensure sustainable profit to OMCs at the sometimes protect customer and create an equal playfield for all OMCs. The study recommends that EWURA as a regulator should investigate further to improve suitability and applicability of price cap formula.