Forex crunch stirs lubricants shortage
A critical shortage of motor oil and grease is enraging motorists in the country, it was learnt.
Motorists in Addis Ababa told The Reporter that it has been a while since they have faced problem in finding motor oil and grease for their vehicles. The motorists complain that they are forced to use engine oil with inferior quality that is currently on sale at the gas stations across Addis Ababa. “We could not buy the brand of our choice. Some gas stations are selling inferior quality motor oil that is stored in barrels,” they lamented.
International and local oil distribution companies told The Reporter that they are unable to import motor oil and grease due to the dearth of foreign currency. A senior executive of Total Ethiopia told The Reporter that his company has been facing challenges in accessing foreign currency for the import of lubricants. “The banks are not availing foreign currency for the import of lubricants and there is critical shortage of lubricants at the moment,” the executive said. Total engine oil has been in use in Ethiopia since the 1950s. The company has 173 operational Retail Network Stations and about 800 general trade and specialties customers.
Managing director of Gomeju Oil Ethiopia, Tewodros Yeshiwas, told The Reporter that oil companies have been unable to secure foreign currency for the import of lubricants since August 2018. Tewodros said his company was unable to secure foreign currency from the local banks for the past several months.
Gomeju Oil is the sole dealer of Petronas Lubricants, the Italy-based motor oil and grease producer. Petronas Lubricants, signed an exclusive dealership agreement with Gomeju Oil Ethiopia in March 2018 that enables the latter to promote and distribute Petronas products in Ethiopia.
Based in Turin, Petronas Lubricants is a subsidiary company of Petronas (Petroliam Nasional Berhad), Malaysia's fully integrated oil and gas multinational which is ranked among the largest corporations on FORTUNE Global 500. Gomeju distributes Petronas Selenia brand engine oil throughout the country.
Tewodros said that in recent months the local banks – including the Commercial Bank of Ethiopia – are unable to avail foreign currency. “We easily penetrated the local market as Petronas lubricants are globally recognized high quality products. But unfortunately we are not getting foreign currency to import the products which have high demand in the local market,” Tewodros said.
Executives of the oil companies told The Reporter that unless the government intervenes and resolve the shortage of foreign currency the problem will have a serious impact on the overall economy. “Starting from motorcycles to factories different sectors of the economy utilize motor oil and grease. Heavy duty trucks, construction machineries, public transport buses and cargo trucks use lubricants. Major factories like cement and sugar industries need lubricants. It will have a serious repercussion on the economy unless the government addresses the issue urgently,” they said.
Tewodros told The Reporter that Gomeju Oil Ethiopia in partnership with Petronas is in the process to build a lubricant blending facility in Addis Ababa.