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Fuel Shortage Looms as Gov’t Officials Compete Over Crude Oil Contract

Juba, 4, December 2016 - A new race to win lucrative 600,000 barrels crude oil contract is becoming murky as government officials compete over the individual’s companies of interest to win the contract. Various senior government officials in Juba scramble, as each of them pushes a Company for their individual's interests. A well-placed source said the government officials divided themselves among companies with each pushing for a company of a choice. Officials in the office of the President and in the Security split  over  two different Petroleum companies, respectively.

FUEL station in jubaMotorists crambling for fuel in Juba: photos file source RT

In November, a letter allegedly written on 9th November 2016 by the Minister in the office of the office the President, Hon. Mayiik Ayii, circulated in the social media. The Minister allegedly directs the Minister of Petroleum, Hon. Ezekiel Gatkouth to award the contract to Arech Petroleum. “Following the directives by H.E. The President to award the Arech Petroleum South Sudan Ltd. with 2017 refined fuel supply to South Sudan, kindly let’s bring to your attention that APSSL requires all necessary legal paperwork as per this contract to be finalized as soon as possible”, read part of the letter.


The Minister adds his opinion; “I recommend that Arech Petroleum be given this contract to start fuel supply by January 2017 as directed by his Excellency. Senior officials in NilePet, on the contrary, push for Trafigura as their sole company that does the business with them. The office of the First Vice President, on the other hand, is pushing for King Gas Ltd. to get award of the contract.


Last week the committee forwarded the Arech Petroleum to the Ministry of Finance for clearance, but the minister refused to grant Arech Petroleum the clearance. A source said that “The Ministry of Finance refused to issue a letter of No Objection if a company (name withheld) is not part of the companies awarded the contracts”, he said. Powerful individual in the office of South Sudan’s President are said to be pushing for a company of interest to get the award. The committee is expected to meet this Monday to review. However, an official in the Ministry of Petroleum who spoke to the Nation Mirror on condition of anonymity said, “It is difficult splitting 600,000 barrels among the four companies because most ships operating within the route transporting South Sudan crude oil to international market carry minimal of 600,000 barrels each”.


In wake of revelation of illegal contract awards practice, the Presidency directed in November that Fuel Supply contract awarded to Oryx Petroleum allegedly bulldozed in the interests of the office of Vice President, under James Wani Igga, and ministry of cabinet affairs, under Martin Elia Lomoro, and Ministry of Petroluem under Ezekiel Gatkouth Lul be cancelled. The cancellation has ushered into the race for 600,000 barrels lucrative contract a new elements, which took the center stage of the process. A concern citizen told The Nation Mirror on condition of anonymity for fear of government reprisal said, “The officials in the Office of President Kiir, office of First Vice President, under Taban Deng, Ministry of Defense, under Kuol Manyang, National Security among others are using their influence to profiteer from illegal contract awarding processes at NilePet”.


In November Gen. Kuac Awan bellowed a whistle over manner fuel supply contract of monthly 600,000 barrels crude oil is used to benefit senior government officials. Each month the government allocates 600,000 barrels of crude oil to be sold on its behalf by independent company, which in turn import Petrol and Diesel fuel to the country for domestic use.


The whistle bellower said the Minister of Cabinet Affairs, Martin Elia instructed NilePet boss to single source the 600,000 Crude Oil contract to Oryx Petroleum in violations of rules governing public bidding. The laws and regulations expect all the government contracts to be subjected to open public bidding. Nonetheless, Minister Martin Elia is not alone in bypassing the rules. Many senior government officials chose the opposite as each directly walks into NilePet premises with a preferred company at hand.


The regulation tasking NilePet to select the supplier through open bidding also expects committee selected to operates without senior officials influencing the process of the open public bidding.


Sources in Juba say the country is likely to be hit by a new wave of fuel shortages next January, as a direct result of government officials’ disagreement over company to supply the country with Fuel.

Economic Meltdown in the country

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