The Ethiopian Ministry of Finance has passed a directive on price adjustments for cement, rebar, and ceramics following a request by the Ministry of Construction and Urban Development. The price adjustment directive was issued after the recent surge in prices of construction materials.
Similarly, the Ministry of Trade and Industry has passed a directive that provides a fund to oil companies as compensation for the new price modality that was recently issued by the Ethiopian government. The price modality requires oil companies to pay for the oil that they receive upfront.
The oil companies had protested the new price modality over the past few weeks and even refused to sign the agreement documents issued by the government. The stand off had led to a drastic increase in oil prices and losses amounting to more than 3 billion ETB.
With the new fund, the Ministry of Trade and Industry expects oil prices to stabilise. The Ministry of Finance expects the same with its new directive. The ministry also advised the public office to give special attention to contractor administrative efforts in order to implement the required evaluation and control measures for the sake of mitigating the current challenges the market faces.
As Ethiopia’s public procurement and price adjusting authority, the Ministry of Finance is responsible for managing price escalations under the public procurement directive of 2010.