The Ethiopian Petroleum Supply Enterprise (EPSE) has floated an open international tender inviting companies for the supply of petroleum products to the country in 2017.
The enterprise wants to buy one million metric tons of diesel, and 130,000-150,000 metric tons of benzene that would be delivered in January-December 2017. Ethiopia’s annual fuel consumption has been growing at a rate of ten percent year on year. Last year, EPSE imported three million metric tons of petroleum products valued at two billion dollars. Next year the fuel consumption would surge to 3.4 million metric tons.
Last year the country consumed 288,000 metric tons of benzene, two million metric tons of diesel and 710,000 metric tons of jet fuel (kerosene). This year EPSE plans to buy 330,000 metric tons of benzene, 2.2 million metric tons of diesel and 820,000 metric tons of jet fuel. But the Ethiopian government has long-term agreements with the governments of Kuwait and Sudan to buy jet fuel, diesel and benzene from the two friendly countries without tender.
EPSE buys 100 percent of the country’s jet fuel consumption, 800,000 metric tons and 60 percent of diesel, 1.2 million metric tons from Kuwait. The state-owned Kuwait Petroleum Corporation (KPC) supplies the two products directly from Kuwait using its own fuel tanker vessels. Sudan supplies 85 percent of Ethiopia’s benzene consumption.
Hence, EPSE buys 40 percent of the diesel and 15 percent of the benzene consumption from international oil trading firms through an international open tender process. Next year the enterprise hopes to buy 820,000 metric tons of jet fuel and 1.2 million metric tons of diesel from Kuwait. It anticipates buying one million metric tons of diesel from the market.
It expects to receive 200,000 tons of benzene from the Sudan and hopes to buy 150,000 metric tons of benzene from oil traders. Sudan is expected to cover 70 percent of Ethiopia’s benzene consumption in 2017.
EPSE floated the tender in September 2016 and companies are given 45 days to submit their proposals. Tadesse Hailemariam, CEO of EPSE, told The Reporter that the bid would be opened on October 31, 2016. International oil trading firms are buying the bid documents from the enterprise.
Tadesse said the technical proposals would first be evaluated and the companies that successfully passed the technical evolution would be summoned for the financial evaluation. “The company that offers the least price would be the winner,” Tadesse told The Reporter.
Tadesse said once the bid is opened it would take about 15 days to announce the final results of the bid. The bid committee includes representatives of the Commercial Bank of Ethiopia (CBE), the Ministry of Finance and Economic Cooperation and officials of EPSE.
In the past two consecutive years, the Bahrain based Vitol won the bid floated by the enterprise. The Vitol Group is a multinational corporation engaged in energy and commodity trading business. The official website of Vitol says physical trading, logistics and distribution are at the core of the business but are complemented by refining, shipping, terminals, exploration and production, power generation, mining and retail business.
EPSE is the sole government body tasked with the import of fuel. Petroleum distribution companies buy the fuel from EPSE at the port of Djibouti, transports it to Ethiopia and distributes to all parts of the country.
Ethiopia consumes daily one million liters of benzene, 6.5 million liters of diesel and two million liters of jet fuel. The annual kerosene consumption is 260,000 metric tons. The consumption of kerosene is dwindling as the public is using electric stoves instead of kerosene ones. The country has 13 fuel depots in different parts of the country that can store 360,000 cubic meters of petroleum products.
[www.thereporterethiopia.com/]