Addis Ababa mayor warns fuel stations
The Addis Ababa city administration deputy mayor Takele Uma (Eng.) has warned gas stations and petroleum companies operating in the city to properly discharge their responsibility.
At a meeting held with stakeholders on Wednesday, Takele stated that some of the gas stations are engaged in fuel hoarding and other illegal fuel transactions harming city residents. “The Addis Ababa city dwellers are suffering to get fuel. As a city administration we will not tolerate this,” the deputy mayor said. “Fuel is a strategic commodity,” he added.
Takele warned that the city administration would closely monitor the fuel stations’ activities in the coming days and would take appropriate legal actions against those who are engaged in illegal activities. Police forces have been deployed at the gas stations operating in the city.
The fuel shortage hit Addis Ababa and regional towns this week following the closure of the Addis Ababa Djibouti corridor due to the public protest in the Afar Regional State in connection with border dispute with Somali ethnic group (Isah). About 1000 fuel tanker trucks carrying fuel from Djibouti Horizon Fuel Terminal. Currently Ethiopia imports 80 percent of its fuel demand through the port of Djibouti and the remaining from Sudan.
The Ethio-Sudan boarder was closed last week following an armed clash in West Gondar zone, Genda Weha locality between residents of the town and members of the national defense forces. More than 70 fuel tanker trucks were stranded at the border town of Metema.
CEO of EPSE, Tadesse Hailemariam, told The Reporter that the Ethio-Djibouti corridor was opened and fuel tanker trucks are now freely shuttling between Addis Ababa and Djibouti. “All the tanker trucks that were stranded in the Afar region have now arrived Addis Ababa and regional towns and have unloaded the fuel. More trucks are now coming to Addis Ababa. And those who have unloaded are heading to Djibouti to bring more fuel. So the situation is getting back to normal,” Tadesse said.
Tadesse told The Reporter that the Metama road was opened on Tuesday and the fuel tanker trucks which were stranded at the boarder have arrived at their destinations and have delivered the fuel. Sudan is supplying 20 percent of Ethiopia’s gasoline demand.
In the consultative meeting with the deputy mayor Tadesse Tilahun , CEO of National Oil Company (NOC) noted that the problem is not with the oil companies and gas stations. According to Tadesse, enough fuel is not being loaded at the Port of Djibouti. “What is wrong with selling with barrels and Jerricans if it is distributed in the country? The problem is the fuel stations are not getting enough amount of fuel. From where can they bring gasoline if they do not get it from the Djibouti?”
Tadesse noted that petroleum companies and gas stations are working with minimal profit margin hampering the growth of the oil distribution sector and dwarfing the sector’s contributions to the economy. “We are under financed due to the low profit margin and we are subsidizing the public,” Tadesse said.
Tadesse Hailemaraim argued that enough volume of fuel is procured and transported to the country. “It is true that there is capacity limitation at the Horizon Fuel Terminal. But the Horizon Terminal is efficient. They work 24 hours and load adequate volume of fuel that we want.”
Ethiopia annually imports four million metric tons of fuel valued at three billion dollars. Of the total import gas oil accounts to 63 percent, gasoline 13 percent, jet fuel 20 percent, kerosene 2 percent and fuel oil 2 percent.
Tadesse said that EPSE buys enough volume of fuel after making thorough assessment on the country’s demand.
“If you take gasoline the daily consumption is 1,750,000 liter. We increased it to 1,800,000 lit and two million liters recently. And still it is not enough. We know how many vehicles are running in the country and we know their average consumption. So where is the gasoline going? It must be going to neighboring countries,” he said.
Tadesse noted that fuel is a strategic commodity that the government annually spends three billion USD. “The government should investigate the matter and address the issue as it spends a huge sum of money on fuel.”
Shortage of gas stations has exacerbated the problem with the fuel distribution sector. There are 800 gas stations across the country and 100 of them are found in the capital. There are about 900,000 registered vehicles in the country and 450,000 of them are concentrated in Addis Ababa. “A gas station in Addis Ababa on average serves 4000 vehicles. This is too much,” Tadesse said. We should also start using train to transport fuel and we should think of building a pipeline all the way from the ports to Awash fuel depot. The trucks could transport the fuel from Awash to the regional towns,” he said.
The deputy mayor told oil companies that the city administration will look at the possibly that the oil companies can secure land for the construction of fuel stations. “We will deliberate on the land issue. We will see how we can avail land. But for the time being we should focus how we efficiently serve the public with the existing fuel stations.”
In the past few days the public was wondering why the EPSE does not use the national fuel reserve to stabilise the soared fuel market. A liter of gasoline was sold as high as 100 birr in the streets of Addis Ababa. Some even went to the extent of saying that the country does not have a national fuel reserve.
EPSE has a total of 12 fuel depots with a capacity to store 367,000 cu m of fuel, the biggest is Awash depot. “There is enough amount of national reserve. But we use the national reserve when we encounter a critical problem which is beyond the government‘s control. The current challenge will last in few days. The situation is under control. It is contained and there is no need to rash to utilise the national reserve,” he concluded.
EPSE is under preparation to build a modern fuel depot with a capacity of storing 240,000 cu m of fuel in Dukem town, 35 km south east of Addis Ababa.
EPSE estimates that the country would need 2,780,000 metric tons of gasoil, 840,000 metric tons of jet fuel, 494,000 metric tons of gasoline and 83,000 metric tons of fuel oil in 2019. The country’s total annual fuel demand in 2019 is estimated at 4,197,000 metric tons valued at 2.8 billion dollars.