Tuesday, May 28, 2024
BusinessProfit margin at gas stations quadruples, but dealers demand more

Profit margin at gas stations quadruples, but dealers demand more

The profit margin of gas stations, which is determined by the government, quadruples. It is a measure that coincided with the nationwide fuel price adjustment.
The adjustment comes a year after the government made a decision to increase the profit margin of gas stations, when many threatened to leave the business because of the unmatched growth of working capital and revenue, which left little room for profit.
The dealers will now get a profit margin of 88 cents per litre, an increase from the 23 cents per litre they have earned for years. However, the management of the dealers’ association is still dissatisfied with the adjustment because they had hoped the government would increase their margin to as much as 1.50 Birr per liter.
“It’s a good progress, but this margin still can’t enable us work effectively” said Ephrem Tesfaye, board member of the Ethiopian Petroleum Dealers Association.
As of last midnight, the price of fuel increased by about 10 percent, necessitating an increase in dealers’ working capital. Managers at the Association believe there is still little room for profit because “the margin is insufficient to cover the costs that dealers incur when buying fuel from oil suppliers.”
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