Amhara region bridges petroleum supply gap through new initiative

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Amhara region has introduced an initiative to construct over 800 oil retail outlets and 100 operational and medium strategic deport in the coming one year on the aim to improve the poor petroleum supply in the region.
Berhanu Taemalew, head of Trade and Market Development Bureau of Amhara, said that the existed dealers’ stations are very far from the growing demand of fuel in the region.
He said that the region had conducted a study that indicates the growing demand of petroleum in the coming five and ten year period.
Currently, the demand is growing drastically in the region in relation with the growing number of vehicles mainly three wheeler cars that expanded in to remote areas in the region. In addition the expansion of household farmers’ irrigation scheme and the increasing access of transportation on all rural areas and other reasons have contributed to the demand.
As per the growing demand the regional administration has introduced an initiative to expand the access to fuel in all Woredas and towns in the region.
“We have tried identifying the growing sector potentials in the coming five and ten years in alignment with what the regional government shall contribute as its targets to meet the growth and expansion of the sectors infrastructure,” Berhanu told Capital.
He reminded that the sector in general is managed by the central government but the regional administration should play its part on the expansion of infrastructure in the region.
Berhanu expressed that the private sector will be responsible in building the deport stations under the initiative dealers’ stations. The set deports include operational deports and medium strategic deports that are lower than the strategic deport that the federal government bears the responsibility of control.
Currently, there are 202 retail outlets in the region, while the operational are 167 stations. According to the Bureau head, the region has 200 woredas and towns but the existing stations only covered 40 percent of the region. “This is supposed to be improved,” he highlighted.
“Based on the plan, the stations are expected to be expanded to 1,000 or additional 800 stations will be constructed. Up to 100 operational depots will be established under the strategy,” he added.
The Bureau head said that the sector is strictly controlled by the government since the private sector interest to invest on the sector is limited because the return on investment may take time.
“To boost the private sector involvement the regional government has taken an attractive initiative on access to investment land,” he says, adding that, “To attract investors, the region will provide plots with initial lease rate.”
So far 217 investors have secured land for station projects and 10 operational depots are under constructions.
The initiative has considered addressing all woredas and towns in the region. Under the new initiative major cities like Bahir Dar, Gonder and Dessie would have additional 10 stations while zone towns will have additional 6 stations. As for woreda capital cities and city administrations, at least four stations will be available.
“The establishment of stations and deports have its own discipline but we will closely follow it under the task force that has been formed by different stakeholders including the region’s Urban Development Housing and Construction Bureau and other offices from top to bottom to finalize projects on time,” he explained.
He said that the region will give attention to the supply of required materials for the construction. “We estimate that the stations including additional 583 from the 800 new retail outlets will be finalized within a year time,” he elaborated.
According to him, the next step will be focusing on the supply side which will involve close working relations with Ministry of Trade and Industry, which is responsible for controlling the sector including the supply of petroleum.
The number of oil stations in Ethiopia is very small compared with the population and area. According to latest information from Petroleum and Petroleum Products Supply and Distribution Regulatory Authority, the number of retail outlets in the country is about 1,100.
Compared with countries that have very small number of population and area like Egypt, Kenya and Uganda it is very small. The stations in Egypt are 3, 450, 1,842 in Kenya and 1,545 in Uganda.