Lebanese ZR Energy wins state fuel import tender

ZR Energy offered to provide 95 octane gasoline at market price

  
Lebanese Minister of Energy and Water, Nada Boustani Khoury speaks during an interview with Reuters at her office in Beirut, Lebanon, August 21, 2019.

Lebanese Minister of Energy and Water, Nada Boustani Khoury speaks during an interview with Reuters at her office in Beirut, Lebanon, August 21, 2019.

REUTERS/Mohamed Azakir

BEIRUT: Caretaker Energy Minister Nada Boustani Monday awarded Lebanese company ZR Energy the contract for importing 150,000 tons of gasoline on behalf of the state to avoid a fuel crisis, after the announcement was delayed a week. ZR Energy offered to provide 95 octane gasoline at market price, plus $38.90 per ton, with a fee of $0.80 for discharge at any additional port.

The caretaker minister was originally set to announce the winning bid on Dec. 2, but decided to postpone the conclusion of the bidding by a week to “allow more competition,” after only two companies submitted offers.

Three companies had submitted bids to the state tender by Monday: ZR Energy, Lebneft FZE and Oman Trading International. A fourth company, which Boustani did not identify, also submitted a bid but did not provide the correct documents as outlined in the book of terms.

Boustani had published the book of terms and opened the offers live on television in an effort to “increase transparency.”

Oman Trading International offered to provide gasoline at market rate, plus $46.80 and $1 for discharge at an additional port, while Lebneft FZE offered $39.36 with $0.75 for an additional port.

The 150,000 tons make up around 10 percent of Lebanon’s annual gasoline consumption. According to the minister, this first attempt to hold tenders for the state to import gasoline was a “trial run” to decide whether the state could in the future be responsible for purchasing a larger share of Lebanon’s fuel needs.

“Congratulations to the winning company and to the Lebanese people, the state has entered the market,” Boustani said after she announced the winning offer put forward by ZR Energy.

ZR Energy, registered in Dubai, is owned by Lebanese businessmen Teddy and Raymond Rahme, who founded the ZR Group in 2005 and are stakeholders in several Lebanese banks.

Raymond Rahme is implicated in a U.S. lawsuit involving the death of American businessman and arms dealer Dale Stoffel in 2004 in Iraq, where he allegedly acted as a middle man between Iraqi Defense Ministry officials and Stoffel’s company. The $25 million paid to Rahme’s Lebanese account by Iraqi officials was never transferred to Stoffel, who was assassinated on Dec. 8, 2004.

Rahme is also implicated in a lawsuit filed by Kuwaiti logistics firm Agility and French telecoms company Orange for the misappropriation of millions of dollars.

The Daily Star could not reach Rahme for comment Monday.

Boustani said at Monday’s news conference that “the market is always open to any company that wants to import petroleum products,” and that the ministry would announce a tender for the import of diesel Wednesday.

She repeated her assertion that the first shipment of gasoline should arrive within 15 days “if the procedures are finished quickly.”

However, according to the tender documents, the shipment may not arrive in Lebanon until Jan. 6.

The book of terms published by the ministry says that once the tenders close, the ministry has one week to officially notify the winning bidder, which then has another week to confirm and sign the contract, before the shipment, which typically takes 10-15 days, is sent.

The import plan aims to avoid fuel shortages and ensure prices do not rise for consumers, Boustani has previously said.

The tender offer was launched on Nov. 15, following a series of strikes by fuel sector business owners, in protest against dollar shortages and high exchange rates. While customers purchase goods, including fuel, in Lebanese pounds, importers purchase them with U.S. dollars.

Copyright © 2019, The Daily Star. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Energy