Enterprise Opens Petroleum Bid

By Berhane Hailemariam ( FORTUNE STAFF WRITER )

36 companies responded to the tender but only three submitted their offer

Three international companies are competing to supply gas oil, regular gasoline and jet fuel to the nation in the coming year.

Vitol, Trafigura and Petro China are vying to supply 1.2 million tonnes to 1.4 million tonnes of gas oil; 390,000tn to 450,000tn of regular gasoline; and 230,000tn to 280,000tn of jet oil. The companies offered to supply within these margins.

The same tender was floated by the Ethiopian Petroleum Supply Enterprise on September 26 and then again on Thursday, October 28, 2018, to allow more time for bidders to prepare their tender documents.

"The extension was the result of requests made by the suppliers who claimed that they did not have sufficient time to prepare," said Abayneh Awol, chairperson of the tender committee and manager of Petroleum Supply & Sales Department at the Enterprise.

Thirty-six companies purchased bid documents, while only three submitted their technical and financial offers at the bid opening, which was witnessed by Tadesse Hailemariam, CEO of the Enterprise, and representatives from the Commercial Bank of Ethiopia and the Finance Ministry.

Vitol Group is a global energy and commodity trading company founded in Rotterdam in 1966. Trafigura is a multinational oil and metals trading company founded in 1993 and headquartered in Geneva, and Petro China is a Chinese oil and gas company established in 1999 and headquartered in Beijing.

The bidders compete by offering their transportation fees and size of premiums, according to Abayneh. The company with the lowest offers for transportation costs and premiums will supply the fuel starting from January 2019 on a monthly basis to a depot in Djibouti.

After the arrival of the petroleum, it will be distributed to 26 oil retailers, which have around 800 fuel stations throughout the country. The retailing is dominated by four companies, namely National Oil Company (NOC), Yetebaberut Beherawi Petroleum (YBP) Oil Libya and Total.

"In addition to this open bid, another equal amount is purchased through government-to-government transactions from Sudan and Kuwait," Abayneh said.

The nation's demand for petroleum has been rising annually by about 10pc. Last year, the enterprise imported 3.8 million tonnes valued at three billion dollars, while the preceding year's import was 3.4 million tonnes.

This procurement comes in the middle of a fuel shortage in the past few weeks at the gas stations.

"There was some shortage two weeks ago caused by the actions of transporters from Djibouti, where the government covered it from its national oil reserve depots around Addis Abeba," said Adugna Disassa, sales and marketing manager of Oil Libya.

Tekleberhan Bekele, operations manager of National Oil Company, agrees but attributes the shortage to the illegal transaction of gasoline.

“Increasing the profit margins for the fuel companies, transporters and dealers is a good solution, since that is the cause for frustration and embezzlement,” said Tekleberhan. “More fuel stations in the city will also increase the accessibility of fuel to customers.


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