Ministry Prepares to Stem Petroleum Fraud, Reduce Waste

The Ministry of Water, Irrigation & Energy is introducing new petroleum quality detecting digital laboratories and fuel analysers at a cost of 12 million Br.

“The main objective of the project is to control fraud in petroleum supply and minimise petroleum quality problems by increasing the accessibility of laboratories as well as improving the regulating capacity of the directorate,” Biruk Birhanu, acting director of Petroleum Downstream Operation Regulatory Directorate at the Ministry, told Fortune.

This Directorate will replace the role of the Ethiopian Petroleum Supply Enterprise that used to detect the quality of imported petroleum and petroleum products upon the request of the Ministry. According to Biruk the new laboratories will do away with the present time-consuming processes.

Existing laboratories are unable to detect small amounts of other materials fraudulently added to the petroleum, a problem which will be avoided by use of the new laboratories, he continued.

On the other hand, the fuel analyser equipment to be introduced, measures the density and temperature of petroleum simultaneously. The existing system uses more than one piece of equipment such as an evaporation analyser and flash point which measure the evaporation and firing degrees, respectively. The equipment is also able to immediately test a sample without waiting for it to settle, unlike the existing laboratories,  according to Abele Gizaw, labratory expert at the directorate.

To supply this digital petroleum laboratory equipment, 17 companies had bought the bidding document, among which seven have passed the technical evaluation. The companies which are now competing for the financial evaluation are; two Indian based companies Sioria International India and Maalab Scientific Equipment Ltd, Austrias based Rofa Laboratory & Process Analyser, German based Undutschgmbh, Gedion Alula Import Export, Unit Export represented by its local agent Tensie International Business Plc and Sicaca Trading Plc a United Arab Emirates company.

Aside from the laboratories, Proclamation number 838/2015 to regulate petroleum supply was also made this year and its regulations as well as the directive to implement the proclamation have been arranged by MoWIE.

Each year around 200 million Br is squandered in the country as a result of petroleum fraud and the government’s tax revenue loss due to petroleum fraud is estimated to be around 180 million Br annually, according to reports.


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