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Ethiopia needs to pay 4.4 billion USD for gas procurement

  

Tadesse Hailemariam, Director of Ethiopian Petroleum Supply Enterprise (EPSE) (photo :SM)

By Staff Reporter

ADDIS ABABA – (BORKENA) – Ethiopian Petroleum Supply Enterprise (EPSE) says over four billion USD is needed for the procurement of gas for the upcoming Ethiopian budget year. EPSE disclosed here that 4.4 billion USD is needed for 4.3 million metric tons of gas planned to be imported during the next Ethiopian Budget Year.

The weekly Amharic Reporter said in its Sunday issue quoting a senior official of EPSE that a Bahrain Company named Vitol that won the international bidding contest has signed an agreement for the supply of the gas Ethiopia needs in the coming Fiscal Year.

Vitol supplies hundred percent of the benzene demand and 40 per cent of the white diesel, which the Ethiopian Petroleum Supply Enterprise had planned to import next Ethiopian Year, Reporter said.

As per the procurement agreement, the Company will supply 760,000 metric tons of benzene and 1.2 million metric tons of white diesel needed for the budget year. 

Information obtained from EPSE indicates that Vitol won the bid through a contest it had engaged in with two other companies, according to Reporter. This same petroleum supplying company has won the bid floated for the provision of gas to Ethiopia this current Budget Year.

Chief Executive of EPSE, Tadesse Hailemariam told Reporter that of the 4.3 million metric tons of gas planned to be imported during the coming Ethiopian Budget Year, 2.7 million metric tons is white diesel. The remaining 760,000 metric tons is benzene while 680,000 metric tons is aircraft gas. Vitol Company will reportedly supply 1.2 million metric tons of the planned 2.7 million metric tons white diesel to be imported here. The same company supplies the entire amount of benzene needed locally, according to the weekly, Reporter.

Ethiopia executes gas procurement in two ways. The first is done through agreements conducted between governments. Sixty percent of white diesel and 100 percent of aircraft petroleum will be imported from Kuwait. The second type of procurement is done through an international bidding contest. The chief executive said that all benzene consumption Ethiopia needs is imported through an international bidding contest. 

Previously benzene was imported from Sudan but now as the transaction was disrupted, the procurement is processed through bid floating. Accordingly, the Bahrain Company, Vitol is acting as per the bid agreement it signed with EPSE to import the gas. Similarly 40 percent of annual consumption of the white diesel will be imported through the bid process, according to Tadesse.

The fuel consumption planned to be imported during the coming budget year surpasses that of the current year by eight percent. The consumption of benzene shows an eight percent increment while diesel has a sharp rise of five percent. Chief executive of EPSE said that aircraft gas has shown a big increase. Accordingly, the planned procurement of the coming budget year increases by 20 percent. This accounted for the increase of passengers who are using Ethiopian. Previously the Ethiopian Air Line was short of passengers due to the Covid pandemic, Reporter said.

The total amount of gas Ethiopia is expecting to import this ending budget year is 3.9 million metric tons, according to Tadesse. 

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1 COMMENT

  1. What is happening with all that discovery of huge amount of petroleum reserve we have been deafened with since the 1970’s? The areas where the reserves were found are now said to be peaceful. Unless that country develop its own local talents and skills to build its own refineries this budget bleeding will get worse and worse. It has somehow to find solutions to minimize brain drain it has been suffering since the Mengistu era. I bet you there are numerous engineers specialized in the field now working for energy group of companies here in the West and everywhere else. One is saying he/she is not going back just to work for an ‘Orommumaa’ regime. The other one saying he/she will wait until Oromia is liberated. The rest are saying he/she will not go back just to get caught up between the ugly politics of radical Amharas and Oromos. So the budget will continue to bleed profusely. Typical Africa, right?

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