By Hayal Alemayehu, Reporter
Sudan Petroleum Corporation, the Sudanese oil producing giant which currently provides slightly over 80 percent of Ethiopia’s benzene consumption, is set to become the sole supplier of the commodity to Ethiopia.
The state-owned oil company will as of next month start providing 100 percent of Ethiopia’s benzene consumption, following an agreement made earlier on between the two governments, Yigzaw Mekonnen, the CEO of the Ethiopian Petroleum Enterprise, told The Reporter.
Ethiopia has been importing about 20 percent of its benzene consumption mainly from the Middle East via the Port of Djibouti (before Sudan Petroleum Corporation started supplying the balance five years ago). And the suppliers from the Middle East are big time corporations that make huge profits from the supply. But with the Sudan, the trade entertains a preferential treatment. This makes the benzene that comes from Sudan significantly cheaper, thereby helping the country to save a sizable foreign currency, according to Yigzaw, who heads the sole government body authorized to import the country’s fuel consumption.
Oil import bill for the current Ethiopian fiscal year is projected to increase by 9.3 billion birr (53 percent) compared to the budget allocated for same during the previous year. The Ethiopian Petroleum Enterprise will import 2.4 million tonnes of fuel, including benzene, for the current 2010/11 fiscal year.
The volume of the fuel projected to be imported this year surpasses that of the previous year by 500,000 tonnes.
The government had been subsidizing the fuel import for several years before it called it quits a year ago following the IMF’s advice to stop the subsidy. This has helped the government to secure hundreds of millions of birr.