Monday, December 15, 2014

Ethiopia: Fuel Distribution Quandary Hits Nation

No more fuel.
No more fuel.
December 15, 2014 (The Reporter – Pro-government website) — A day after the Ministry of Trade (MoT) declared a slight reduction in fuel retail price, fuel shortage has hit the nation including Addis Ababa and other major cities.
However, the government refuted the shortage claim and accused distributors for deliberately creating the crisis.
Earlier this week the MoT announced a new retail price for fuel. According to the price that was readjusted by the Ministry, the new retail price of ordinary benzene is 19.41 birr per liter while light diesel and kerosene are sold for 17.49 and 15.40, respectively. Similarly, light black diesel, heavy black diesel and plane fuel are sold 17.49, 15.14 and 19.43 birr per liter, respectively.
After the price cuts, the past few days saw long queues in different parts of Addis Ababa’s gas stations. Similarly, in Bahir Dar, Dire Dawa, Jimma and Adama towns only limited number of gas stations were delivering fuels for their customers.
According to witnesses from Bahir Dar, only two stations have been operating and were struggling hard to meet the demands of their customers.
Station goers speculated that the owners did not bring sufficient fuels for some days in fear of price cuts.
Meanwhile, a Bajaj driver from Dire Dawa told The Reporter that most vehicles were forced to sit idle on Thursday and Friday due to shortage of fuel in which he said that only two stations were working to cater to their customers needs as huge number of vehicles were waiting for hours to fill their tanks.
However, The Reporter learnt that Hawassa was not hit by the crisis unlike other towns of the Southern Nations and Nationalities and Peoples’ Regional State and the rest of the country.
The fuel crisis has also affected some private schools in the Addis Ababa. The administration of one private school in the capital (name of the school has been withheld) posted on the school’s notice board a statement that read, “Since there is fuel shortage in the city and most of our students are not able to come on time. So we would like to announce that the school has been closed for today.”
This week the Addis Ababa City Administration Trade Bureau announced that it nullified some 11 gas stations’ trading permits that are accused for the current shortage of fuel in the capital.
In addition to nullifying trading permits, the Bureau is deliberating on what measures it can take against those who are deliberately delaying shipment till the price of oil is fixed.
According to the minister of state for Trade, Ali Siraj, the main problem is caused by multinational oil importing companies. The Ministry issued several cautionary messages to these companies stating that if they fail to rectify the error, they will be put out of the market.
Currently, there are 200 fuel trucks on the Port of Djibouti for the purpose of transporting fuel to Ethiopia in order to address the problem. In addition to this, companies are allowed to borrow fuel from companies with surplus.
Global oil price has fallen by more than 40 percent since June, when it was USD 115 a barrel. It is now below USD 70. This comes after nearly five years of stability. At a meeting in Vienna on November 27 the Organization of Petroleum Exporting Countries (OPEC), which controls nearly 40 percent of the world market, failed to reach agreement on production curbs, sending the price tumbling. Also hard hit are oil-exporting countries such as Russia, Nigeria, Iran and Venezuela.

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