Fuel Procurement Committee, established by the Prime Minister’s decree, saves nearly $20 million monthly in electricity costs.
The Ministry of Electricity and Energy has announced significant financial savings in the cost of fuel procurement and transportation to and from all liberated provinces. This achievement has notably reduced the financial burdens on the government, enhanced the efficiency of electricity generation operations, and improved the service provided to citizens. This comes following the establishment of a tender committee for the procurement of fuel for power generation stations, as per the decision of Prime Minister Dr. Ahmed Awad bin Mubarak, number (20) for the year 2024, aligning with the government’s approach to enhance the principles of transparency and governance of procedures.
A report issued by the ministry revealed that since the tender committee began its operations, it has achieved substantial financial savings in fuel and transportation costs, thereby reducing the government’s financial burdens. The savings compared to the average purchase for the year 2023 amount to approximately $19.8 million monthly, with an estimated 55,000 tons of diesel. The committee managed to achieve a 31% reduction in fuel purchase costs through transparent and competitive tendering processes, enabling access to the best offers from suppliers, reducing expenses, and increasing the economic efficiency of power generation stations.
The report, titled “Measuring the Impact of the Prime Minister’s Decision Regarding the Formation of a Tender Committee for the Purchase of Fuel for Power Generation Stations,” indicates that the committee’s procedures have also improved operational efficiency through better transportation and supply operations, enhanced power station operation efficiency, and reduced downtime. This has led to an overall improvement in the performance of the electricity sector.
Transparent tendering procedures have fostered competition among suppliers, leading to better offers and improved fuel quality. According to the report, the committee has achieved more than 50% savings in transportation costs for crude fuel to operate the main power station in Aden by enhancing contracting processes with transportation companies and adopting more efficient logistical strategies. This saving is a result of the transparency measures adopted and the establishment of standard technical reference terms, which reflected in selecting highly efficient companies at competitive financial costs, thus reducing the overall cost of delivering crude fuel from Nashima port to the main power station in the temporary capital, Aden.
The report emphasizes that the fuel procurement and supervision committee, established in 2018 with support from the Saudi Program for the Development and Reconstruction of Yemen, has successfully ensured the immediate delivery of fuel to stations and integration throughout the supply chain. This has improved the continuity of fuel supply to the stations and reduced downtime. It also highlights the committee’s efforts in receiving and distributing fuel grants from Saudi Arabia and the United Arab Emirates, ensuring full transparency in the distribution process for power generation stations in the liberated areas and enhancing governance mechanisms.
The report points to the government’s strategic direction, led by Prime Minister and Minister of Electricity and Energy Man’ bin Yamin, to reduce the energy file’s burden on the state’s public resources and spend the allocated funds properly, considering sound governance. It focuses on expanding the use of alternative energy, reducing the use of high-cost fuel, and prominently, the successful and efficient inauguration of the Aden solar power station with a capacity of 120 megawatts, supported by the United Arab Emirates. Similar projects are being initiated in other provinces, emphasizing the development of practical partnership formulas with the private sector in this promising field, providing necessary facilities, finding sustainable solutions, and continuing technical and administrative reforms to address existing imbalances at a high pace according to clear plans and visions.
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