Ethiopia’s Ministry of Trade and Regional Integration (MoTI) has announced plans to allow private companies to engage in importation and distribution of fuel, ending the state monopoly of the business for decades.
Addressing members of parliament (MPs) over the weekend MoTI’s minister Kasahun Goffe said the decision is part of the government’s broader initiative to liberalize various business sectors and encourage market competition.
“One of the draft bills that was submitted to the House of Representatives allows private companies to enter into the fuel import, breaking the long-standing monopoly held by the Ethiopian Oil Supply Company,” Goffe said.
Goffe emphasized that the proposed changes will enable private companies to import oil products just like any other commodity, with the goal of operating the sector based on market principles.
He noted that the government’s reform efforts in the oil sector aim to reduce the country’s dependence on expensive oil imports, which has been draining the nation’s foreign exchange reserves.
“A country that spends its entire export earnings on importing oil cannot grow. This has been slowing down our development,” he said, noting that the bill was designed to fundamentally change this situation.
The minister further clarified that if the government successfully adjusts oil product prices to market levels by the end of this year, private companies may begin importing and selling fuel by next year.
The reform, if successful, will shift the role of the Ethiopian Oil Supply Company, whose focus will be narrowed to supplying fuel for large government projects and providing affordable fuel to lower-income segments of society.
The proposed amendments to the bill are expected to be reviewed and approved by the House of Representatives in the coming weeks, marking a significant step toward transforming Ethiopia’s oil sector.
Tugset Nguse, the head of legal services at the Ethiopian Oil Supply Company, raised concerns during the discussion.
He suggested that, if private companies are allowed to import fuel, they should be subject to the same responsibilities as the state-owned company.
This includes building reserve fuel depots and maintaining a stock of reserve fuel, a provision he argued should be included in the draft bill.
MG/as/APA