Officials at the Ministry of Trade and Regional Integration are awaiting the disbursement of USD 50 million to enable five oil companies import crude palm oil.
It is part of the USD 100 million the Macroeconomic Committee allocated for the fiscal year following the request from the Ministry at the beginning of the year.
Half the amount had already been disbursed to the manufacturing companies in the first quarter of the fiscal year.
Imported from countries such as Malaysia, the crude palm oil is used by the five local processing companies. Phibela, W.A., Shemu, Hamaressa, and Al-Impex are the companies for which the foreign currency is earmarked.
Teshale Belehu, state minister for the Trade Ministry, presented the first quarter’s performance report and the Ministry’s fiscal year plan to the Parliament, highlighting the success of the Franco Valuta and the allocation of foreign currency to companies in stabilizing the market.
“Over 28.6 million liters of palm oil are imported by 113 importers with their own foreign currencies through Franco Valuta. This greatly contributed to market stabilization. Also, the Macroeconomic Committee allocated USD 100 million for the five companies,” he said.
However, the market has not seen the price reduce for eight months since it reached the highest price of 1,200 birr per five liters of cooking oil.
The ministry had requested an allocation of USD 600 million during the last fiscal year, but the committee approved a little less than USD 400 million, of which 85 percent was disbursed to the companies. The skyrocketing price of oil globally has affected the amount of crude oil the companies were importing.
The price is showing a decent decrease this year compared with last year, but it is still very high compared with what it was two or three years ago, according to an official at the Trade Ministry.
“A ton of crude oil was worth less than USD 500 three years ago at the Port of Djibouti, and it skyrocketed to USD 2,000 last year,” the official said. “The total price of the same volume is now selling for USD 1,200.”
For Teshale, the challenge still lies on the distribution side, as the companies struggle with distributors that have lost interest in the business. “The biggest problem now is that of distribution. There are no distributors picking the oil from the factories’ warehouses.”