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BusinessGPS scarcity casts shadow on fuel subsidy for Public Transporters

GPS scarcity casts shadow on fuel subsidy for Public Transporters

The shortage of GPS devices that have fuel sensors is feared will be an obstacle for the price discrimination that is going to be introduced in the fuel sector.

Following the instructions by Transport Bureaus of regions and city administrations, owners of mass transport providers are expected to install GPS devices on their vehicles and register accordingly.

Unable to carry the burden of fuel subsidy, the government had announced it will no longer provide the subsidy except for mass transporters, which will be given a two months grace period.

Subsidizing about a hundred percent of the value, the government has been selling fuel at gas stations for over 31 birr a liter. Addis Ababa Transport Bureau, on its part gave a deadline until mid-May to vehicle owners to install the GPS devices and register for the subsidy.

The Bureau announced that the recording of all data concerning vehicles eligible for the subsidy in Addis Ababa will be finalized and transferred to a database by mid-June of this year.

Other regional transport offices are expected to follow their footsteps.

However, GPS distributers in the country fear this might not be applicable due to shortages of supply on their part.

“Let alone the shortage problem we have now, we can’t even import more, since we were not provided with specifications of the devices required for the service,” said a manager of Abet Trading, one of the 30 GPS importers that were given the green light by the Ministry.

The Ministry of Transport and Logistics is in charge of supervising the suppliers and provide them with the requirements to import the product.

Abet has been importing the GPS device on previous occasions but the fuel sensor and further specifications were not under consideration. They were importing and installing mainly regular GPS devices that only manage vehicles’ locations.

A single regular GPS device is currently being sold for as high as 9,000 birr, but the ones with the fuel sensors would fetch higher prices. 

The other concern is the availability of sufficient devices, considering the number of cars that will be enrolled in the subsidy.

Registered with plate numbers Code 1 and Code 3, there are around 13,000 mass transport service providers in Addis Ababa alone.

Confirming that it had set a deadline for the vehicle registration and GPS installation, the Bureau’s communications head, Aregawi Maru, claims that the number of vehicles might vary given that the vehicles might leave the business or new ones joining it.

For him, GPS installation and registration is possible within the period of time left, as few vehicles already started to do so. And importers are expected to fill the supply gap.

“I don’t believe it is difficult to install the GPS within this period of time,” Aregawi said adding, “For fear of high prices and speed of the work, the transporters’ union is also requesting to import the GPS themselves.”

Managers of Abet believe it is possible to import the equipment and install it, if the Ministry provides them with the specifications required in time.

Getachew Wolde, an importer, also confirmed that the stalled procedures to import the device by the Ministry boil down to its failure to inform them on the specifications. He claimed the importers have been notifying the Ministry to provide them with the details but to no avail.

“Different types of cars need different types of devices. We need to know the types as soon as possible,” Getachew said.

Abel Habtemariam, who drives a minibus in Addis Ababa, claims to have not heard of the deadline set by the city’s transport bureau and the price of the device.

“I don’t have all the money to pay upfront now,” Abel said adding, “No driver will be able to pay it unless they provide loans to pay in two or three periods.” 

The Reporter’s several attempts to get a reply from Ministry of Transport and Logistics bore no fruit.

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