Petroleum smuggling poses challenge in distribution system

Seharla Abdulahi, Director General of the Ethiopian Petroleum and Energy Authority told Origins Business that petroleum smuggling across and outside the country is posing a distribution problem.

Previously, petroleum smuggling was obvious in Eastern Ethiopia but now it’s a rampant practice across the northern part of the country, she said.

Sahrela said that on May 2022, 19 petroleum trucks of petroleum failed to be distributed across Gonder and smuggled to other areas.

“While we investigated where it has gone, we found out that it has smuggled to Tigray region and neighboring countries,” she said.

Seharla added: “Smuggled petroleum to Tigray region is illegal as it’s transported there without the government’s approval”.

Besides Gonder, seven trucks that haul petroleum were smuggled to west Gojjam, a fuel truck to East Gojjam and another tanker truck in Awi, according to Seharla.

She said that the Authority is increasing its supervision on petroleum distribution; even trying to present some individuals who are suspected of smuggling before court.

Ethiopian Petroleum Supply Enterprise (EPSE) also announced that there’s no supply shortage of petroleum stressing that the major problem is distribution.

Ethiopia’s annual oil consumption has reached 3.8 million metric tons, which 65 percent of this is gasoline. Over $250 million is currently spent every month on fuel purchases, according to EPSE.

Compared to the previous year, the annual petroleum import bill of the government has increased by close to 19% during the last budget year 2020/21 reaching an all-time high of 72.60 billion Birr. In the previous budget year 2019/20 ended July 7, 2020; Ethiopia spent a total of 62.05 billion Birr to purchase close to 3.87 billion metric tons of petroleum.