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Ethiopia needs four billion USD for oil, gas procurement

Ethiopia _ Gas oil
Image credit : Addis Fortune

By Haile-Gebriel Endashaw
Staff reporter

ADDIS ABABA –  Ethiopia needs four billion USD for the procurement of oil and gas over the coming Ethiopian New Budget Year, sources said. The Amharic Weekly Reporter said in its Sunday issue that over four billion USD is needed for domestic fuel consumption of the 2016 Ethiopian Budget Year. The Reporter quoted Ethiopian Petroleum Supply Enterprise (EPSE) as saying that a bidding process has been launched to execute the procurement.

EPSE said that the four billion USD expense proposed for the next Ethiopian Budget Year could be variable taking into consideration the international inconsistent price of petroleum.

Department Head of Petroleum Supply and Sales with EPSE, Abayneh Awol, said that the amount needed for the next Budget Year is four metric tons of oil and gas while the current total need is 3.8 million metric tons. Therefore, the next year needs to exceed 200,000 metric tons over the current budget year, according to Abayneh.

Abayneh said that the Ethiopian total oil and gas supply shows an average annual increment of 10 per cent, but the supply of the next year budget will have only a five per cent increment.

According to the Department Head, the next 2016 Ethiopian Fiscal Year petroleum supply requires expenses that amount 212 billion birr or 4 billion USD. Abayneh said that of the total petroleum procurement, 45 percent is diesel while the rest is benzene and aircraft petroleum.

Reporter quoted another source that 164 billion birr or three billion USD has been expensed to supply 3.8 million metric ton of oil and gas in the current 2015 Ethiopian Budget Year. Therefore, comparing expenses of the oil and gas provision of the 2015 Ethiopian Budget Year, the next year allotment shows a difference of Birr 48 billion or one billion USD.

“Though four billion USD is needed for the petroleum, the variable of petroleum price or exchange rate at international level will affect the rising and falling of the budget allocation. 

Of the total diesel needed during the coming year, from 1 to 1.2 million metric tons will be procured through bidding process from international suppliers. Non-bidding procurement agreement will also be conducted with Kuwait for the same amount of diesel, according to Abayneh. 

As per the agreement reached earlier between Ethiopian and Kuwait governments, Kuwait Petroleum Corporation will provide annual consumption of 50 percent of diesel and 75 percent of aircraft petroleum to Ethiopia. The remaining 50 per cent diesel and 25 per cent aircraft oil will be purchased through a bidding process from international suppliers. Abayneh said that the bidding process was floated at international level to purchase the diesel from international companies for the 2016 Ethiopian Budget Year.

Abayneh further said that as per the agreement reached between the Government of Ethiopia and Sudan, Ethiopia purchased through non-bidding procedure 40 percent of its annual needs of benzene supply from Sudan over the past years. The difference, 60 percent, was purchased through a bidding process from international suppliers.


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