Somali region announces that it will take strict measures on those involved on petroleum contraband.
Sources said that despite the region accessing required fuel from the oil companies, which are distributing the petroleum imported by the Ethiopian Petroleum Supply Enterprise, shortage mainly in the capital JigJiga is observed.
According to sources in the regions, the problem is directly related with the illegal activity that some retailers or their employees are involved in including illegal activity of selling the product beyond the border.
Late this week Mustafe Muhumed Omar, President of Somali Region, on his social media page stated that the regional administration will take strict measures on those involved on petroleum contraband.
The Trade and Transport Bureau of the region has also said that the region and JigJiga have ample supply of petroleum, while shortage is seen because of the contraband which will be corrected moving forward.
It has been stated that benzene and naphtha of petroleum is one of the contraband commodity fleet from Ethiopia at the border area in the south, south east or west.
The main reason for that is that the Ethiopian government is subsidizing the product. The subsidy makes the product significantly cheaper than the price in neighboring countries market.
Due to that traders who have chains at the oil retail stations are smuggling the product to regional markets. The information that Capital obtained from the region indicated that the volume that petroleum crossing the border is growing from time to time which directly reflected in the local market negatively.
The information obtained from the Somali region President’s Office also stated that in the past few weeks, huge volumes of petroleum that was being transported in by different ways, including big trucks, have been sized.
Now the regional administration has warned that the government will take serious measures including confiscating trucks that are involved in the smuggling of the product. Moreover licenses of the stations which are involved on the illegal activity will be revoked besides other legal measures.
Recently the central government has announced that it has designed to apply a quota on oil distribution for stations in Somali and Oromia regions mainly for the towns that are highly attached with the contraband activity. The quota will allow the government to limit the amount it delivers for those border areas. The decision will impose a burden for regional administrations to tighten their regulation to curb the contraband on the aim to keep the public from petroleum shortage.
Ethiopia allocates almost similar proportion of foreign currency income secured from export earnings to oil import.