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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.
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