Petroleum sector is categorized into two categories namely upstream and downstream. Upstream activities involves exploration and production activities, while downstream includes importation, storage, transformation, export, inland transportation of crude oil and refined petroleum products, wholesale and retail distribution of petroleum products including liquefied petroleum gas. In the context of The Energy and Water Utilities Regulatory Authority Act, Cap 414 the petroleum downstream is referred to as the regulated petroleum sub-sector.
Tanzania consumes about 1.54 million cubic metres per annum of petroleum products wholly imported from Mediterranean, Arabian Gulf and sometimes from Durban, South Africa. Effective from January 2000, petroleum downstream sub-sector was liberalized enabling Oil marketing companies to individually procure and trade petroleum products in accordance to their market requirements and setting pump prices based on the prevailing market forces.