Addis Fortune (Addis Ababa)
Wudineh Zenebe
21 January 2008
Addis Ababa — The Ministry of Trade and Industry (MoTI) instructed the six oil supplying companies operating in Ethiopia to supply blended oil in Addis Abeba signing a throughput agreement with Nile Petroleum Co. The Ethiopian Petroleum Enterprise has also briefed these companies on January 9, 2007, to take the oil from the company's Sululta Depot 24Km from Addis Abeba, in the Oromia Regional State.
According to a three-year agreement signed between Nile Petroleum and the government, the companies will receive a cubic metre of blended oil for 40 Br. Five per cent of the oil is currently ethanol and the remaining is gasoline but the ethanol content is expected to rise annually.
According to a senior official at MoTI, the issue of blending came into consideration six years ago.
The Ethiopian government in April 2006 endorsed the five-year 342 billion Br Plan for Accelerated and Sustained Development to End Poverty (PASDEP). In this plan, 233 billion Br is spent on capital projects that consume large quantities of fuel.
The government has since turned its attention from fossil fuels to explore the possibilities of using the increasingly popular renewable resource, bio-fuel. It wants to cut down on the current 8.6 billion Br it spends to import oil. This is estimated to be 87pc of the total value of exports.
Due to instabilities in oil supplying countries and soaring demand from emerging economies, the price of oil has reached an all time highs around 100 dollars per barrel. Coupled with environmental concerns many Ethiopia is not alone is seeking alternatives
"This is a big opportunity for Ethiopia," a senior official commented. "We have cheap labour and huge chunks of land suitable for bio-fuel development and this will facilitate our growth."
The Council of Ministers has endorsed a Biofuel Development and Usage Strategy in September 2007. The strategy targets using bio-fuel energy providing incentives for flex fuel vehicle (able to combine bio and traditional fuels) importing individuals. It also envisages replacing kerosene with ethanol for cooking at home.
"We are ready to distribute this blended fuel," Tadesse Tilahun, general manager of National Oil Company (NOC) told Fortune. "But we need to upgrade our depots accordingly."
Ethiopia has 700,000hct of suitable land for sugarcane plantation, whose by-product is an input to produce ethanol.
According to the strategic plan, if all this land is cultivated, the country will be able to produce one billion litres of bio-fuel, seven times higher than the current oil demand.
The country is acting on increasing its ethanol production as the expansion of its three sugar factories - Finchaa, Metehara and Wonji-Shoa - is expected to raise total production to 143 million litres annually. Its current domestic supply of 8.1 million litres of ethanol comes from Finchaa alone.
NPC was established in 1954 as Nile Import and Trading Oil Company, a subsidiary of Total, with the Sudanese government holding a 75pc stake until 1993. The company, totally state-owned since 1993, has a 60pc share of the marketing and distribution of petroleum products in Sudan.
The Addis Abeba City Administration has granted Nile Petroleum three plots for fuelling stations.
Be the first to Write a Comment!
Copyright © 2008 Addis Fortune. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
