Ethiopia extends deal for oil product purchase from Sudan

Addis Ras Shell was not only a place to buy benzene
but my favorite Kitfo tukul in the city the question is:
suppose the price of benzene increases do they
decrease the price of the Kitfo or disappear?

16 January, 2008

A one-year benzine purchase agreement was signed between Ethiopia and Sudan on Thursday after the two were on the verge of halting petroleum product imports from Sudan.

If imports were halted Ethiopia may be forced to pay as much as 10 million dollars more every year to get its fuel from Gulf nations.

Ethiopia was going to be compelled to cease importing petroleum products from neighbouring Sudan, an arrangement that has saved Ethiopia millions over the last five years.

The state-owned Sudan Petroleum Corporation (SPC) – which supplies Ethiopia with gasoline and liquid petroleum, among other oil products – has been reported it would stop allowing Ethiopia to purchase on credit. Furthermore, the US Department of Treasury in May 2007 placed the SPC on its sanctions list over Sudanese government support for militia groups terrorizing the Darfur region, putting diplomatic pressure on Ethiopia to cease its business relationship with the company.

Up until May 2007, when the US imposed sanctions on SPC, Ethiopia was importing petroleum products from the Sudan through a Letter of Credit (L.C) facilitated by CBE and Citibank. With Citibank now restricted from dealing with SPC, the Sudanese oil company strictly requires Cash Against Document (CAD) for all procurement of the petroleum products that Ethiopia purchases from the Sudan.

But now, the purchase contract extends by a year an earlier procurement agreement signed five years ago with the terms to be kept intact, the Ministry of Mines and Energy announced.

Mines and Energy Minister Alemayehu Tegenu had held consultation with his Sudanese counterpart Dr. Awad Ahmed Al-jaz of Sudan, who signed on the minute of their deliberation to provide for the said purchases extension agreement.
The Ethiopian Petroleum Enterprise has been responsible for making benzine purchases.

Enterprise General Manager and Sudan Petroleum Corporation Director General inked the purchase extension contract.
According to data available from the Ethiopian Customs Authority, in fiscal year 2005/06 alone, Ethiopia brought in two billion litres of petroleum products, spending about 860.5 million dollars.

By Groum Abate Capital