Page 5 - AfrElec Week 06 2021

AfrElec FUELS AfrElec

“We foresee potential that this agreement of the fuel in power generation, vehicle transport,
with Accugas-Savannah will serve as a platform petrochemicals and various other sectors.
for increased co-operation between our two Savannah produced some 102.9mn cubic feet
companies as we work to achieve our shared per day (1.06 bcm per year) of gas at the Uquo
vision of bringing ever larger volumes of gas field in 2020, marking a 16.6% increase year on
to the Nigerian market, creating value for our year. The company also produced a small quan-
shareholders and ultimately the industries and tity of condensate at Uquo and some oil at the
people of Nigeria,” he said. Stubb Creek marginal deposit. Savannah also has
Nigeria is on a push to commercialise more of exploration assets in neighbouring Niger.™
its substantial gas reserves by expanding the role

Ethiopian fuel distributors urge government

to reconsider cash-based payment system

ETHIOPIA THE Ethiopian Petroleum Dealers Association may not be able to secure these loans will have
(EPDA), an industry association representing to leave the business,” he said. “This might cre-
local fuel distributors, has once again asked ate needless disruptions in oil provision in the
Addis Ababa to reconsider its plan to switch to country.”
a cash-based payment system. EPDA has already made multiple inquiries
Traditionally, state-owned Ethiopian Petro- about the new payment system to the govern-
leum Supply Enterprise (EPSE) has extended ment, he noted. “When the law first came into
credit to all 30 of the firms that supply petro- effect, we were not sure this would trickle down
leum products to domestic distributors. In Sep- to us, as it pertains to the companies,” he said.
tember 2019, however, EPSE announced plans “That was why we initiated a discussion with the
to switch to a cash-based payment modality in relevant government bodies.”
order to overcome problems with debt collection To date, authorities in Addis Ababa have
stemming from the rising number of companies mostly ignored EPDA’s queries, he stated. As
involved in the business. Since then, it has been a result, he said, the group has now formally
phasing out the credit system in stages. requested an audience with the Ministry of
With this process due to be completed in less Trade and Industry and the Ministry of Mining
than a month, the suppliers working with EPSE and Petroleum.
are now demanding that distributors – includ- As of press time, neither of the ministries had
ing the members of EPDA, which number more responded to this request. EPSE has said previ-
than 100 – pay for all the fuel they receive in ously that it is ready to reimburse fuel suppliers
full. This demand is putting great pressure on for expenses incurred as a result of the switch to
distributors, which have no way to obtain the cash-based payments, including but not limited
short-term credits they need to cover opera- to interest payments on bank loans.
tional expenses, and could cause some firms to Tadesse Hailemariam, the CEO of EPSE, reit-
go out of business, according to Ephrem Tesfaye, erated that point at the weekend. “All expenses
a member of the association’s board of directors. incurred by the [supply] companies associated
Ethiopia is home to more than 800 fuel distri- with the new modality will be compensated,” he
bution companies, and most of them do not have told Addis Fortune. “The expenses will not be
the physical collateral needed to secure loans transferred to the companies.” ™
that could be used to pay their suppliers, Tesfaye
told Addis Fortune at the weekend. “Those that

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