Sonatrach to lose fuel contract monopoly in Lebanon

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Lebanon has decided to diversify its oil suppliers from 2021 after the main supplier, Algeria’s Sonatrach, was accused of providing the Middle East country with adulterated fuel.

Lebanon Energy Minister Raymond Ghajar told Bloomberg that the Lebanese government has opted to multiply for the next coming three years its fuel suppliers.

“We would prefer to have several of them. In case of any issue, we can work with another one,” the Lebanese official stressed.

The move will mark an end to Sonatrach’s monopoly of fuel market in the Middle East country. The Algerian oil giant has been since 2005 the sole contractor through its Lebanon-based subsidiary, Sonatrach Petroleum (SPC).

SPC has been mired in an adulterated fuel scandal after the Lebanese electricity company, EDL, lodged a complaint against Sonatrach Petroleum in April this year for the supply of poor quality fuel to the state-run company.

Investigations launched into the case also revealed that SPC concealed the suppliers and paid kickbacks worth sizeable amounts of money to agents through trading companies.

SPC CEO Tarek Faoual and several of his employees have been arrested in connection with the scandal. Algeria has denied any wrongdoing arguing that the case was an internal Lebanese affair.

Ghajar however told Bloomberg that Sonatrach will continue supplying the country until the end of this year, when its contract comes to close.