5 August 2017

Ethiopia: Oilibya Expands With 17 More Stations

OiLibya, one of the biggest fuel suppliers in the country, has made the most significant expansion in eight years by opening 17 additional petrol stations with an estimated cost of 75 million Br in partnership with individual developers. This will raise the number of stations of OiLibya to 167.

The Company already opened five stations last month; two are in Addis Abeba, and the remaining are located in five regional states. The remaining petrol stations will be opened in the next four months.

The new stations opened in Addis Abeba are located in Gorro and Hanna Mariam Sefer. The three others are in Azezo in Gondar, Elala in Meqelle, and Sebeta in Oromia Regional State. Within the next few months, the Company will have the other stations in Asosa, Meqelle, Gondar, Dilla, Yabelo, Borena, Tulu Dimtu and other places.

OiLibya provides infrastructure, technical support and supplies the oil it receives from the Ethiopian Petroleum Supply Enterprise (EPSE) to individual developers, who join with land to plant the stations and develop the facilities. The Company also maintains, repairs and replaces station equipment whenever there is damage as far as the contract upholds.

The Company is pursuing this path because it could not afford to lease land and the lower profit margin that exists in the country does not encourage to fully own stations, according to Eshetu Zeleke, a retail manager at OiLibya.

OiLibya gets a profit of 0.9 cents a litre in the Ethiopian market, and its partners enjoy a profit margin of 0.7 cents a litre.

Out of the 3.5 billion litres of petroleum consumed in Ethiopia last year, OiLibya provided one billion litres, which indicates the company supplied 280,000 litres a day. The number of oil imports has been growing by six percent annually, reaching 3.4 metric tonnes in 2016/17.

There are 17 oil companies, having 800 stations throughout the country. OiLibya, Total, National Oil Company (NOC) and Yetebaberut Beherawi Petroleum (YBP) are the biggest petroleum suppliers in Ethiopia and control 85pc to 90pc of share in the market.

However, the existence of alleged illegal transactions are becoming significant challenges for companies like OiLibya, according to Eshetu.

"There are legally licensed companies selling 18 million litres of petroleum monthly to the market without running a station," said Eshetu. "The government doesn't carefully follow these companies to check to whom they supply and whether they pay taxes properly."

Kiros Alemayehu, acting communications director at the Ministry of Mines, Petroleum & Natural Gas (MoMPNG), is not aware of the challenge raised by Eshetu.

"Assessment is needed to be assured that there are such transactions in the market," he said. "I can't tell right now."

OiLibya, a brand name for Libya Oil Holdings, previously was owned by Tamoil Africa.

The Company has a presence in 18 African countries where the people and government of Libya have a significant share in the company. It joined the Ethiopian market nine years ago after fully acquiring Shell Ethiopia and Djibouti Petroleum Retail Businesses.


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