Ethiopia: Nile Petroleum agrees to pay 650m Br late debt

01 March 2017, Addis Ababa – Nile Petroleum Corporation, the Sudanese-owned oil company operating in Ethiopia, has reached an agreement with the Ethiopian Government to repay a debt of over a half a billion Br. The debt was accrued with the Ethiopian Petroleum Supply Enterprise (EPSE).

The company, which moved into the Ethiopian market in 2007, accrued debts of around 750 million Br, due to payments that had not been made for oil deliveries from the Enterprise, as of August 2016. Due to the outstanding payments, the enterprise had suspended the supply of oil to Nile’s outlets for the past six months. However, Nile had since paid 100 million Br, leaving a debt of around 650 million Br.

The company’s senior management, on a visit to Addis Abeba, met with government officials as well as representatives of the Petroleum Enterprise on Friday, February 24, to discuss possible solutions to settling the company’s debts.

The agreement stipulates that the debt will be paid over 18 months. However, there have been no firm agreements about when the Enterprise will resume petrol deliveries to Nile, although it is expected to resume in the near future.

“The two countries have a long and rich history of working together,” says Demelash Alamawe, assistant to the CEO of the Ethiopian Petroleum Supply. “The agreement will help to ensure that the relationship between the two countries continues on a good path.”

Despite repeated attempts, the representatives of Nile Petroleum were unavailable for comment.

The profit margin from fuel is very low in the oil industry, whose imports and distribution is tightly controlled by the federal government. Oil companies tend to make more money from imports and retail of lubricants rather than retailing oil.

There are seven companies engaged in the supply of petroleum in Ethiopia, one of which entered the market very recently. They own more than 660 petrol stations, according to the Ethiopian Petroleum Supply Enterprise. Nile Petroleum has more than 55 petrol stations, including some which are under construction.

  • Addis Fortune
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