Ethiopia to Adjust Fuel Profit Margin

Ethiopia to Adjust Fuel Profit Margin

The Ethiopian Ministry of Trade, and Ministry of Mines, Petroleum and Natural Gas (MoMPNG) are cooperating to develop a study in the aim of adjusting the profit margin for petroleum companies operating in Ethiopia. Currently the profit margin of a company engaged in fuel distribution is $0.08 per liter while fuel station owners make $0.07, Petrol World reported.

According to 2Merkato, the new law will allow the Ethiopian Petroleum Supply Enterprise to be the lone importers and provider of benzene, diesel and kerosene.

“The committee will soon finalize the study and the required adjustment will be made based on the study,” Minister for Mines, Petroleum and Natural Gas, Motuma Mekassa commented on the subject.

One of the main struggles facing the distribution of fuel in Ethiopia is scarcity of land. Oil companies and investors that plan to build fuel stations face challenges when they try to secure land, particularly in Addis Ababa.

Motuma stated that his Ministry has been discussing with the Addis Ababa City Administration over the availing land for gas stations. “Studies indicate that the city needs 250 additional gas stations. The city administration is under preparation to offer 60-65 plots of land for gas station construction. They will make more lands available based on the new city master plan,” Motuma explained.

Currently there are 710,000 vehicles in Ethiopia, out of which 480,000 are in Addis Ababa. However, there are only 100 gas stations Ethiopia’s capital, meaning 1 station is for 4,000 vehicles.


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