Investors can only build fuel stations if they possess at least 2,000 square meters of land, according to a draft standard from the Institute of Ethiopian Standards and the Petroleum and Energy Authority.
The draft stipulates that fuel stations must occupy land plots measuring at least 2,000 square meters, with a recommended size of 50 meters by 40 meters.
The new initiative setting forth land area requirements is a joint effort between the Institute and the Authority to develop standardization in the industry.
The standard aims to ensure fuel stations meet certain criteria before commencing operations. It addresses various aspects like the area, design, and construction of stations. Officials note the increased land plot requirement responds to growing demand for fuel stations catering to trucks and large vehicles.
Builders will be required to maintain a minimum 40-meter frontage area. Additionally, facilities must be situated at least 500 meters away from water wells, 30 meters away from residential buildings, and 100 meters away from institutions like schools, churches, libraries, hospitals, and playgrounds.
Recognizing the significance of this standard, officials from the Authority recently convened a stakeholder meeting on September 19, 2023. The meeting brought together representatives from petroleum companies, dealers, and interested parties to discuss potential implementation of this transformative measure.
Recent reports indicate that land prices in Addis Ababa have reached unprecedented levels, with a maximum recorded price of 500,000 birr per square meter. Taking the average price of 250,000 birr per square meter, obtaining a suitable plot would require a substantial investment of at least 50 million birr.
The Authority, as the leading regulatory body overseeing the petroleum sector, has emphasized the importance of establishing a standard. With a focus on monitoring the proper distribution of fuel and streamlining the supply chain system, the Authority aims to ensure a transparent and efficient industry.
As part of the overall requirements for selecting suitable fuel station sites, the standard emphasizes the need to align with the distribution requirements set by the authorities. It also stipulates that the distance between new stations and existing ones should be within 500 meters.
Critics have raised concerns about the proliferation of gas stations in locations with low vehicle traffic, particularly in towns like Moyale. Such allegations have fueled debates about the potential role of these stations in facilitating fuel smuggling.
The draft standard includes specific construction requirements aimed at ensuring efficient operations. One notable provision mandates the installation of a minimum of three underground storage tanks at each station. Moreover, to cater to the different petroleum products being offered, at least one underground tank with a capacity of 50 cubic meters (50,000 liters) must be in place.
The standard also emphasizes the importance of modernization by specifying that one of the fuel pumps used for dispensing fuel should be a digital pump with two-way operation.
Ephrem Tesfaye, board member of the Ethiopian Petroleum Dealers Association and the owner of a gas station in Addis Ababa’s Asko neighborhood, commends the requirement for larger station areas.
Given the nature of the business, which demands ample space, Ephrem believes the standard’s minimum land area of 2,000 square meters is a commendable step.
Located in the outskirts of the capital, Ephrem’s gas station sits on a spacious 2,800 square meter plot, providing ample room for vehicles, including heavy trucks that require refueling.
Many of the older gas stations in Addis Ababa have faced challenges due to road expansions and other factors, resulting in a loss of space. Consequently, these stations struggle to accommodate multiple vehicles at once.
Ephrem points out that this limitation often leads to roads being blocked by vehicles queuing for refueling due to the limited space available at these stations.