The Merchandise Wholesale and Import Trade Enterprise of Ethiopia revealed the pre-conditions for the government contract to import oil in a letter sent to the Public Procurement and Disposal Agency.
The move is in anticipation of the expiry of the government contract with oil suppliers from Singapore, Indonesia and Malaysia in the coming May.The new contracts will establish that suppliers cannot load more than 22 tons of oil in a container designed to carry 20 tons as current suppliers have been loading up to 50% more than the designated amount in contravention of Ethiopian Roads Authority regulations for excessive loads explained MWITE.
The new contracts will also increase the amount of oil being imported every month by 9000 tons and to vary the sizes of the containers to meet rural and urban needs as required. With this in mind the contracts require 50% of the imports to be in three and five liter cans for urban demand, and larger containers for rural use.
It is to be remembered that government took over the import of oil following the price caps briefly introduced in 2011.
The supply of oil since then has been intermittent in some areas especially in the smaller liter containers demanded by low income consumers in Urban areas says MWITE.
It is yet to be disclosed if the government will decide to continue to subsidize the imports or if MWITE will still be the agent in charge of the distribution.
It will be difficult to halt government subsidizes as the market is yet to stabilize as had been the intention of the government said Ali Siraj, State Minister of Trade.
Source: Addis Fortune