Project Proposal Forgreen Petroleum

Feasibility Study on Establishment of Petroleum Company
FEASIBILITY STUDY
FOR
ESTABLISHMENT OF PETROLEUM COMPANY
PROMOTER- GREEN PETROLEUM DISTRIBUTOR PLC
February 2018
Addis Ababa, Ethiopia
1 G-two Investment & Environmental Consulting PLC

TABLE OF CONTENT
TABLE OF CONTENT..................................................................................................................2
EXECUTIVE SUMMARY.............................................................................................................4
1. INTRODUCTION...................................................................................................................5
1.1. Objective of the project...............................................................................................................6
1.2. Socio-Economic Significance of the Project.................................................................................6
1.2.1. Provide better service.......................................................................................................6
1.2.2. Source of Revenue...........................................................................................................6
1.2.3. Employment Opportunity..................................................................................................7
1.2.4. Benefit for Local Community............................................................................................7
1.2.5. Stimulate the Local Economy..........................................................................................7
1.3. Location and Premises Required..................................................................................................8
2. MARKET STUDY AND CAPACITY..................................................................................12
2.1. Market Study.............................................................................................................................12
2.1.1. Overview of Petroleum Industry in Ethiopia.................................................................12
2.1.2. Demand Analysis............................................................................................................14
2.1.3. Supply Analysis - Petroleum Products.........................................................................21
2.2. Plant Capacity and Production Program....................................................................................27
2.3. Pricing........................................................................................................................................27
2.4. Target Market............................................................................................................................28
2.5. Marketing Promotion and Strategy...........................................................................................28
3. TECHNICAL STUDY OF THE PROJECT.......................................................................30
3.1. Product/Service Description of the Company............................................................................30
3.2. Machineries and Equipments....................................................................................................31
3.3. Civil Engineer Building and Civil Works......................................................................................32
3.4. Proposed Business Legal Status & Sharing.................................................................................33
3.5. Utilities.......................................................................................................................................33
3.6. Project Implementation.............................................................................................................34
4. ORGANZATION AND MANAGEMENT...........................................................................35
4.1. Organization and Management.................................................................................................35
4.2. Man Power................................................................................................................................35
2
4.3. Organizational Structure............................................................................................................36

5. FINANCIAL REQUIRMENT AND ANALYSIS.................................................................40
5.1. Total Initial Investment Cost......................................................................................................40
5.1.1. Fixed Investment.............................................................................................................41
5.2. Annual Service (Production) Cost at Full Capacity.....................................................................42
5.3. Financial Analysis and Statements.............................................................................................43
5.3.1. Underlying Assumption...................................................................................................43
5.3.2. Sources of Fund..............................................................................................................44
5.3.3. Loan repayment Schedule.............................................................................................45
5.3.4. Depreciation Schedule...................................................................................................45
5.3.5. Revenue Projection.........................................................................................................46
5.3.6. Balance Sheet.................................................................................................................47
5.3.7. Income Loss Statement..................................................................................................47
5.3.8. Cash Flow Statement.....................................................................................................48
5.3.9. Profitability........................................................................................................................48
5.3.10. Pay-Back Period..........................................................................................................48
6. ENVIRONMENTAL IMPACT OF THE PROJECT..........................................................49
3
EXECUTIVE SUMMARY
1. Project Name Petroleum Company
2. Project Owner Green Petroleum Distributor PLC
3. Nationality Ethiopian
4. Project location Addis Ababa City and Awash town, Afar Regional State
5. Project Composition Petroleum distribution, depot service and fuel station
6. Premises Required The promoter already acquired a total of 5,409m2 (1,889m2 and
3,520 m2)
7. Total Investment Br. 45,560,000 of which 30% equivalent to Br. 13,668,200
Cost
financed by the owner equity and 70% equivalent to Br.
31,892,000 financed through bank loan
8. Employment The total manpower required for the project will be 96 employees
Opportunity
at full capacity.
 Permanent workers 84
 Skilled 50
 Unskilled 34
 Temporary workers 12
 Skilled 2
 Unskilled 10
9. Benefits of the Provide better service, Revenue generation, Employment
project For The
Opportunity, benefits local economy and stimulate local
region/ country
economy.

1. INTRODUCTION
The Ethiopian economy has been registering extraordinary, double digit, and economic
growth for the last fourteen years (Mofed, 2017). When there exist fast economic growth
in one nation, the income of the citizen also increase this phenomena changes the life
style and modernization of the citizen.
In order to keep the economic growth long lasting, there should be parallel growth and
linkage in all sectors of the economy such as manufacturing and service (tertiary)
sector. The development of Petroleum Company as one part of service sector has a
great contribution to the economy in different ways.
However, the number of petroleum companies are limited (19 companies1) in the
nation. Hence, further investments in these areas are very vital for better service
provision for the citizens through that it supports the economic development by
supplying petroleum products for different sectors.
The government of Ethiopia has developed a conducive investment policy packages

and other sectoral reforms at federal and regional level to attract a huge private
investment for the wellbeing of the nation and its citizens as a whole. Besides, it is also
currently implementing the five years growth and transformation plan 2 (2015/16-
2019/20) that gave a space for the development industrialization and tertiary sector by
private sector.
Therefore, the visible market gap, attractive investment policies and deep interest to
contribute for the development of birth town attracts the owners of the envisioned
project to establish Petroleum company in Ethiopia.
1
http://www.epse.gov.et
The owners of this envisaged project has a good business experiences and very
ambitious to establish the company by expecting a good support and facilitation from
the regional government.
1.1. Objective of the project
The main objective of this project is to establish a standard petroleum distribution

company in Ethiopia.
In line with the above main objective, the company has the following specific objectives;
 To import and distribute petroleum products
 To provide fuel station services in different parts of the nation
 To provide depot facilities
1.2. Socio-Economic Significance of the Project
The envisaged project deemed to contribute to the economic development of the nation
in general and the city/region in specific with following ways:
1.2.1.Provide better service
By providing quality petroleum products and supportive service, the project will satisfy
the demand of the customers.
1.2.2.Source of Revenue
As public policy of any nation, the government collects different forms of taxes from
different business organizations and individuals. Among the different forms of taxes,
business income taxes and payroll taxes are collected from undertaking business
activities. Therefore, the company will be serving sources of revenue for federal/regional
government.

1.2.3.Employment Opportunity
One of the problems that the country/Ethiopia faced is unemployment. Therefore, the
current objective of the government is working on tackling the problem of unemployment
and fostering the development process either through creating self employment or
employment in other organization. In this regard, project will hire 96 employees.
Besides, during the construction work of the project extra jobs will be created
particularly for local community in construction part
1.2.4.Benefit for Local Community

Apart from employment opportunity for local community, as a corporate responsibility
the project has been engaged in different development activities. This will better worth
the community in particular and contribute for the development of the nation as a whole
1.2.5.Stimulate the Local Economy

The project will increase economic relationship and transactions among different actors
in the local economy. By distribution petroleum products, the company will benefits
different actors of the economy i.e, transporter, service providers, manufacturer etc.

1.3. Location and Premises Required
A. Project Location
The proposed company main office will be located in Addis Ababa City. One fuel station
will be located in Addis Ababa City, Nefas Silk lafto Sub City,Woreda 11, lebu area. The
site block no. 25, parcel 43, house no. 9999/264.
The coordinate of Addis Ababa fuel station and facilities site is
No. X Y
1 471502.3601 987624.1415
2 471503.1600 987598.9110
3 471503.2366 987678.1446
4 471543.5900 987575.5310
5 471544.2000 987598.3160
6 471544.8100 987621.1010
7 471502.8100 987624.1415
The depot and other fuel station is located in Awash town, Afar Regional State, which is
220kms far from the capital.
The coordinate of Awash Depot and fuel station site is
XY Coordinates
A 625898 991938
B 625942 991962

. The main justifications behind the selection of this location are:
 Strategically located to the central and largest market of the nation (Addis Ababa)
 Relatively advanced development in infrastructure (Power, Water, Telephone
internet, road etc.
 All asphalt road to the nearest market outlets
 Availability of skilled labor force
 High construction works are undergoing in the vicinity
 The gate to port Djibouti
 Conducive investment policy and governance
 Environmentally fit for petroleum company
B. Land Requirement
The total land acquired by the company is estimated to be 5,409 M 2 (3,520m2 for Awash
town and 1,889m2 for Addis Ababa City). The premises acquired and land use plan is
indicated in table below;
The land lease period is 60 years for both area and lease rate 17. 50 birr and 5 birr for
Addis Ababa and Awash town respectively and the payment period is 20 years for both
area.
Table. Premises required and land use plan

SN Description Land Requirement(M2) Remark

1 Awash Station
1.1 Petroleum Depot, tanker and facilities 1,320.00 Awash
1.2 Fuel station, Cafeteria, Shop and Car wash 850.00 Awash
1.3 Office 300.00 Awash
1.4 Loading unloading 500.00 Awash
1.5 Parking and Green area 550.00 Awash
Subtotal 3,520.00
2 Addis Ababa Station
2.1 Fuel station, Office, Cafeteria, Shop and Car wash 1,100.00 Addis Ababa
2.2 Parking, loading unloading and green area 789.00 Addis Ababa
Subtotal 1,889.00
Total 5,409.00
Layout Plan for Awash Site

2. MARKET STUDY AND CAPACITY
2.1. Market Study
2.1.1.Overview of Petroleum Industry in Ethiopia

Ethiopia, at the moment, is a net importer of petroleum products. White and black
petroleum products are imported directly by the Ethiopian Petroleum Supply Enterprise
(EPSE) through third party suppliers. Upon receipt from third party suppliers, EPSE
stores the products at Horizon Terminal in Djibouti and then distributes the different
grades mainly Gasoline (Benzene), Gas Oil (Naphta), Kerosene, Light fuel oil, Heavy
fuel oil and Jet fuel to Oil Companies through a fixed margin structure set by the
government. In addition, EPSE imports Gasoline (Benzene) from Sudan. For the supply
of Ethanol-Gasoline bended fuel in Addis Ababa, initially the Government made an
agreement with Nile Petroleum, a Sudanese Oil Company operating in Ethiopia, where
the latter conducts blending of Gasoline with Ethanol (E5) at its depot in Sululta and
started distributes E5 to Oil Companies in the year 2009. Later on, in the year 2011,
with Libya oil established its blending plant at Akaki depot, the blend ration was
increase from 5% to 10%. In 2015 additional two companies start Ethanol-Gasoline
bending i.e, Yetebaberut Beherawi Petroleum Sh.Co. (YBP) and National Oil Company
(NOC)2.
Fuels pricing and revisions are made by the government on a monthly basis. Lubricants
and greases, however, are being directly imported by the Oil Companies with the
intervention of government in setting prices based on the global fuel price. The margin
set by the Ethiopian government on lubricants and greases is attractive as compared to
the slim margin on fuel. The country consumes 3.8 million tonnes of petroleum annually,
showing an increase of 10pc every year. Last year (2016), the Enterprise imported 3.4
million tonnes of petroleum products valued at 1.7 billion dollars, while the preceding
year’s import was 3.1 million tonnes with a cost of 1.3 billion dollars (Fortune Nov 04,
2017). Increased economic activity coupled with increased government spending in the
areas of infrastructure, power (mainly from consumption of fuel on construction of power
dams), mining and other sectors continues to further expand the demand for petroleum
products.
2
Biofuelsdigest August 20, 2015
For long, few multinational oil companies with little competition to satisfy the increasing
demand had controlled the petroleum industry. Until recently, Shell, Mobil, Total and
Agip were the only companies engaged in the distribution of petroleum products in
Ethiopia.
Global strategies such companies adopt to focus on Oil & Gas exploration coupled with
their stringent operational Safety requirements has forced some of the multinationals
such as Mobil and Shell to move away from the distribution of petroleum products in
Africa. Currently, there are very few Oil Companies (19) engaged in the petroleum
business in Ethiopia. As compared to neighboring countries, Ethiopia has fewer number
of Oil Companies with less competition. A case in point is Uganda and Kenya where
over 50 independent companies are engaged in each countries in the distribution of
petroleum products with aggressive competition in the industry.
Despite persistent and increasing growth in the demand for petroleum products, the
network expansion (the number of outlets being built) and supply by existing Oil
Companies is not adequate. Recent trends in the exit of multinational Oil Companies is
further weakening the strength of the Oil Industry to service the growing demand of the
nation for petroleum products. In view of the current trends in economic growth and
government’s plan to invest millions of dollars in infrastructure, hydropower projects,
mining and others sectors, the current gaps between demand and supply in the
petroleum sector is wide. (messengerafrica May 4, 2017)
2.1.2.Demand Analysis
2.1.2.1. Demand factors

The demand for petroleum products is derived from the demands in transportation
sector, construction, industries, power generation, agriculture, households for cooking
and lighting in rural areas supply, etc. petroleum products are those which are the major
inputs used in these sectors. Since the last decade, the overall development of the
country and that of the end users in the country have been increasing.
In the process of demand analysis for petroleum products, a thorough analysis of the
set of factors that influence the marketing forces are essentially important and
necessary. The first step in the process involves the analysis of the underlying
characteristics of the target markets and their general macroeconomic environmental
aspects.
The demand for petroleum products depends mainly on the performance of the end-
user i.e. transportation sector, construction, industries, power generation, agriculture,
population i.e. households. However, there are also factors such as government policy
and economic performance of the country, which affects the demand for the products.
Accordingly, the demand for petroleum products is a derived demand, which depends
directly on the performance of its major end users and other general factors, which
commonly affects the products. The following factors are identified to be determent of
the demand position of the products under consideration.
 Performance of the national economy;

 Performance of the industrial sector
 Performance of the agriculture sector
 Performance of the construction sector;
 Rate of population growth and urbanization
Accordingly, a throughout assessment of current status and future prospect of these

factors is done as follows.
1. Performance of the National Economy

Among the factors that influence the demand for petroleum products, one of the critical
factor is identified to be economic growth leading to construction and infrastructure
development.
In Ethiopia as a result of the appropriate policy (investment policy) adopted by the

government in recent years the country’s economy is on a higher growth trajectory.
According to the Ministry of Finance and Economic Development (MOFED), the GDP of
the country has registered an average annual growth rate of 10.9 % during the last 11
years ending in 2013/14 which places Ethiopia among the top performing economies in
Sub-Saharan Africa. The agriculture, industry and service sectors’ annual average
growth was 9.0%, 13.8 % and 12.2% respectively.
According to MOFED, in the last four (2011-2014) Growth and Transformation Plan
(GTP) implementation period, the Ethiopian economy has also registered robust growth.
In this period, the GDP annual average growth rate was 10.1%. Agriculture, Industry
and Service sectors have 6.6 %, 20.0%, and 10.7% annual average growth rates
respectively.
The economic growth (GDP at constant basic price) for 2014 is estimated to be 10.3 %.
As per MOFED’s estimates, annual growth rates of the major sectors, i.e. Agriculture,
industry and service were 5.4 %, 21.2 % and 11.9%; respectively and their shares out of
the total GDP were about 40%, 14% and 46 %, respectively.
The registered economic growth (10.3%) was obviously based on the contribution of
wide range of economic activities. The contribution of these activities by major industrial
classification shows that Agriculture; Industry and service industries have contributed
2.3 %, 2.7% and 5.3 % respectively.
The following table depicts the detail value added as percentage of GDP in each sub
sectors for the years 2010/11 to 2013/14.
Table : Percentage Share Of Ethiopia’s GDP In Each Sub-Sector

Industry\Year 2010 /11 2011 /12 2012 /13 2013 /14
Agriculture, Hunting and Forestry 44.6 43.1 42.0 40.1
Crop 30.9 29.8 29.4 28.4
Animal Farming and Hunting 9.6 9.3 8.9 8.3
Forestry 4.1 3.9 3.7 3.5
Fishing 0.0 0.1 0.1 0.1
Mining and Quarrying 1.4 1.5 1.4 1.3
Manufacturing 4.0 4.1 4.4 4.4
Large and Medium Scale 2.6 2.8 3.1 3.2
Manufacturing 1.4 1.3 1.2 1.2
Small Scale and Cottage Industries 1.0 1.1 1.1 1.1
Electricity and Water 4.0 4.9 6.1 7.6
Construction 14.9 15.4 15.5 16.1
Whole Sale and Retail Trade Hotels and 3.6 3.6 3.9 4.5
Restaurants Transport and Communications 4.2 4.3 4.5 4.7
Financial Intermediation 2.5 2.9 2.4 2.6
Real Estate, Renting and Business Activities 9.3 8.8 8.4 7.9
Public Administration and Defense 5.4 5.1 5.0 4.7
Education 2.3 2.2 2.2 2.2
Health and Social Work 0.9 0.9 0.9 0.9
Other Community , Social & Personal Services 2.3 2.4 2.6 2.4
Private Households with Employed Persons 0.2 0.3 0.2 0.2
Total 100.7 100.6 100.6 100.7
Source: MoFED, 2015 Structure of the Ethiopian Economy
Positive performance of the Ethiopian economy is expected to continue in the future.

According to the government’s “Growth and Transformation Plan II” during the period
2016 – 2010 the GDP of the country is expected to grow at an average annual growth
rate of 11%. As a result, demand for the petroleum products is also reasonably

expected to increase as economic expansion continues which in turn will increase the
demand for petroleum products from different subsectors of the economy.
2. Construction Sector Performance

The construction sector is the second largest employer in the country, being an engine
for technology, innovation and overall development. It is one of the driving forces
towards modernization and industrialization in Ethiopia. The growth of the Ethiopian
economy is directly related to the consumption of construction materials and equipment
in many forms, from petroleum products, aluminum, steel to marble and cement to
dozer, crane, concrete mixer etc. The growth of economy is gauged by the development
and constructions of buildings for commercial and non-commercial use as well as
rehabilitation of historic buildings, sectors which use construction material in different
levels.
The economy has been increasing double digits for the past five years. As it is visible
everywhere, this double digit growth is mostly supported by the construction boom.
According to the Ministry of Finance and Economy, the construction sector of the
economy is growing at an average rate of 35.53% annually for the years 2011/12 to
2013/14 and where it registered a growth of 36.4% in 2013/14. Compared with the
national economy, the construction sector of the country has also been increasing at an
increasing rate. The value of the construction sector which was Birr 10.02 Billion in
2004/05 grew to Birr 47.5 Billion in the years 2013/14. The table below presents the
value of construction sector and GDP for the years 2004/05 while the figure following
the table presents the rate of growth of the value the construction sector and GDP.
Table: Value of Construction Sector and Ethiopian Economy (GDP) At Constant Market Price
YEAR CONSTRUCTION GDP
SECTOR
2004/05 10,023 271,799

2005/06 11,074 301,085

2006/07 12,282 335,490
2007/08 13,675 371,571
2008/09 15,272 403,883
2009/10 16,935 455,269
2010/11 19,100 515,079
2011/12 25,108 559,622
2012/13 34,832 618,328
2013/14 47,526 679,766
Source: NBE 2014 Annual Report
Figure: Growth of Construction Sector and Ethiopian Economy (GDP) at Constant

Market Price

Source: NBE 2014 Annual Report
The positive performance of the Ethiopian economy is expected to continue in the

future. As a result, demand for petroleum products such as regular gasoil and gasoil
(diesel) from the construction sector is reasonably expected to increase as economic
expansion continues which in turn creates a large demand for petroleum products.
3. Population Growth And Urbanization

 Population Growth
According to the first national population and housing census, the population as of
1984 Ethiopia was estimated to be 39,868,572. During the second national population
and housing census (1994) the total population was estimated at 53,477,265 which is a
34% increase compared to 1984. During the third national population and housing
census (2007) the population size is estimated at 73,918,505 which is a 38% increase
compared to the population size of 1994.
The recent census has also revealed that 83.9 percent of the population resides in the
rural areas, while 16.1 percent were urban dwellers. The country is among the high
fertility nations with a total fertility rate of 6.9 children per woman. Over 45 percent of the
populations are below age 15, indicating that there is a large potential of women in the
child bearing age. Because of this potential population momentum, whatever
intervention measures are to be taken to reduce fertility, the growth of the population will
show a fast increase for some to come. In fact, assuming the growth rate will decline
from the current 2.9 percent per annum to below 2.0 percent by the year 2030, the
Central Statistical Authority of Ethiopia projected the country's population to be over 106
million by the year 2020 and nearly 130 million by the year 2030. The World Bank
projected the country's population to be over 122 million by the year 2020 and over 158
million by the year 2030. This implies that the population will double in less than a
quarter of a century and may triple well before year 2050.

The total population of the nation is similarly expected to grow which will in turn
increases the demand for petroleum products.
 Urbanization
Urbanization is a development phenomenon that comes about with the development of
a country's economy in general and industrialization in particular. The rate of
urbanization is directly related to the demand for houses. It is expected that as a country
becomes more urban, more houses will be needed to accommodate the increasing
population in urban centers. In 1984 the urban population of Ethiopia contributed only
11.2 percent to the total population of the country (CSA, 1984). Over the ten years
between the two censuses, the proportion grew to 13.7 percent (CSA, 1999) and during
the recent census (2007) the urban population has further grown to 16.1%.
Because of the backwardness of the agricultural practice and diminishing return of

productivity of the arable land, population in the rural areas are on the verge of being
pushed out of their rural niche. This and the above mentioned factors will trigger faster
urbanization in Ethiopia as in any developing country.
Accordingly, the rapid growth of population in general and urbanization in particular will
create a growing demand for construction of various buildings which in turn creates a
huge market potential for the products under consideration.
2.1.3.Supply Analysis - Petroleum Products

The growth of industry is highly dependent on ensuring that petroleum products at the
downstream sector of the industry are distributed consistently and timely to consumers
through an effective and efficient supply chain system. Distribution of fuels through
effective and efficient way includes the concept of quality or keeping the fuel standard of
the country. In Ethiopia, the distribution monopoly was occupied for a long time by four

international oil companies namely, MOBIL, SHELL, AGIP and TOTAL. In 2018, the
number of oil distributing companies in the country has reached 19 .
In Ethiopia all imports of petroleum products are made via Djibouti and Sudanese port
by Ethiopian Petroleum Supplies Enterprise. Ethiopian Petroleum Supplies Enterprise
(EPSE) is a government body and has the authority and responsibility of supply
management of petroleum or fuel products; procure based on the standard and quality
set by Ethiopian Standard Agency (ESA), control quality and temporarily store at depot
in Djibouti and Sudan. EPSE is the sole government organ responsible for the country’s
fuel imports. The Enterprise buys petroleum products with open international tender and
sells it to oil companies that transport the products from ports to the mainland and
distribute them to the public.
Currently road transportation is the only means used to transport fuel. Fuel is
transported from Ex Djibouti and Ex- Sudan port to commercial and retail sites. The
figure below presents the Ethiopian fuel supply view which is 100% road based.

Source Feasibality study for Fuel Station in Boke Tiko town 2016
Currently, Ethiopia has no refinery and buys refined fuel only and imports in two routes,
namely Djibouti and Sudan. All products of fuel regular gasoline, gasoil, kerosene, jet A-
1 (aviation fuel) and heavy and light fuel oils are imported from Djibouti, while only
regular gasoline imported via Sudan
In 2014/15, about 2.8 million metric tons of petroleum products worth Birr 38 billion were
imported by the Ethiopian Petroleum Enterprise. As compared to previous year, total
value of petroleum imports decreased by 20.2 percent mainly due to a significant drop
in international oil price despite a 7.6 percent increase in volume of petroleum imports.
The table below presents the volume of import of regular gasoil, gasoil and kerosene for
the years 2005-2015.

Table: Volume of Petroleum Imports in Metric Ton

Regular
Year Gasoil Kerosene
Gasoil
2005 139,611 745,669 212,550
2006 147,514 851,381 229,898
2007 146,614 927,753 242,847
2008 143,025 1,107,193 265,664
2009 149,967 1,199,673 272,304
2010 162,070 1,250,641 257,022
2011 151,634 1,154,560 239,032
2012 154,286 1,231,815 237,399
2013 169,059 1,351,280 232,942
2014 186,517 1,214,805 235,245
2015 192,150 1,375,424 237,542
Source: EPSE
As can be seen from the above table, the consumption of petroleum products shown a
general increasing trend with some fluctuation. Regular gasoil consumption reached
192,150 metric tons in 2015 from its level of 139,611 metric tons in 2005. Similarly,
gasoil consumption reached 1.4 million metric tons in 2015 from its level of 745,699
metric tons in 2005 while that of kerosene consumption increased 237,542 metric tons
in 2015 from its level of 212,550 metric tons in 2005. The figure below presents the
trend the consumption of petroleum products for the years 2005-2015.
Last year the country consumed 288,000 metric tons of benzene, two million metric tons
of diesel and 710,000 metric tons of jet fuel (kerosene). This year EPSE plans to buy
330,000 metric tons of benzene, 2.2 million metric tons of diesel and 820,000 metric
tons of jet fuel. But the Ethiopian government has long-term agreements with the
governments of Kuwait and Sudan to buy jet fuel, diesel and benzene from the two
friendly countries without tender. (The reported)

Source Feasibality study for Fuel Station in Boke Tiko town 2016

Source; http://www.epse.gov.et
In 2018, there exist 19 petroleum distributor companies in Ethiopia.
Fuel stations in Ethiopia are owned either by the oil companies or individuals; stations
can be owned by oil companies but operated by individual dealers or stations can be
owned by individual dealers and operated by dealers themselves. However, in both
cases fuel stations are working with a specific or branded oil companies to distribute its
products. In 2018, there are about eight fuel stations in Ethiopia distributed throughout
the country.
1) Total Ethiopia Sh.Co.

2) National Oil Company Ethiopia PLC
3) Libya Oil Ethiopaia Ltd.
4) Yetebaberut Beharawi Petroleum Sh.Co.

5) Kobil Ethiopia PLC
6) Nile Petroleum Co.Ltd. Ethiopia Branch
7) Wadi Al-Sundus Petoleum Co.Ltd.
8) TAF Oil PLC
9) Dalol Oil Sh.Co.
10)Olway Petroleum distributor PLC
11)Yeshi Petroleum PLC
12)Gomeju Oil Ethiopia PLC
13)Genet Petroleum
14)Blen Petruoleum
15)Zagol Oil Ethiopia PLC
16)Mulag Oil Importer PLC
17)Erta-ale Oil Ethiopia
18)Halefay Petroleum Trading PLC
19)Tabarak Oil PLC
2.2. Plant Capacity and Production Program
Based on the market condition and plant capacity the project will depot 2,000,000 liters
petroleum and 1,200,000 liters of blending services per day at full capacity( at third
year) 300 days of operation and three shift system .The first three years it is estimated
to produce at 60%, 80% and 100%. Hence the annual production and program for the
project is show in the table below.
Table Company capacity and production program
SN Description Measureme Daily Service Capacity Monthly Service Annual Service

nt Capacity Capacity
Petroleum
1 Products
1.1 Kerosene Liter 2,000.00 60,000.00 700,000.00
1.2 AGO (Diesel) Liter 85,000.00 2,550,000.00 29,750,000.00

MGR
1.3 (Benzene) Liter 28,000.00 840,000.00 9,800,000.00
Lubricant and
1.4 oil Liter 10,000.00 300,000.00 3,500,000.00
2.3. Pricing
It would be important to examine the possible level of price based on the competitor’s
action. In this connection, the existing average prices of similar company were
assessed for the benefit of comparison. Based on the existing in the market. The firm
stetted the prices(with VAT) as follows;
Table pricing of the envisioned Company

SN Description Measurement Unit Price in Birr
1 Petroleum Products
1.1 Kerosene Liter 17.50
1.2 AGO (Disel) Liter 17.65
1.3 MGR (Benzen) Liter 18.80
1.4 Lubricant and oil Liter 90.00
2.4. Target Market
The target markets of the proposed Petroleum Company are;
 Commercial and private transport
 Construction companies
 Power Generation
 Agricultural companies
 Manufacturing Companies
 Mining
2.5. Marketing Promotion and Strategy
To reach customers different marketing ways will be used. Among the different
marketing strategies and tools for promotion controlling the market:
 Printed and non printed forms of advertising,

 Sponsorship of key government activities and public support mechanism.
 Seasonal discount pricing for guest houses and different others customer centric
marketing strategies will be used by the company.
The Petroleum under discussion will have diversified marketing strategies that could
enable it come up with the different competitors in the market. Moreover, customer
satisfaction will be the key marketing strategy of the building.

3. TECHNICAL STUDY OF THE PROJECT
3.1. Product/Service Description of the Company
Fuels, especially petroleum products, are currently the most widely used source of
energy in the world. The same international trend is true in Ethiopia as well. Currently,
Regular gasoline, Gasoil, Kerosene, Heavy fuel oil (HFO), Light fuel oil (LFO) and JTA-
1 are imported by Ethiopian Petroleum Supplies Enterprise (EPSE). Gasoil and gasoline

are used in the transportation, construction, industries, power generation, agriculture,

house hold cooking and lighting in rural areas.
The Petroleum Company will provide the following products/service
The depot and petroleum will start operation with a storage capacity of 600,000 liters. It
will stock and distribution various products such as regular, diesel, kerosene, light fuel
oil (LFO), and LPG.
1. Fuel products: Gasoline (Benzene), LPG (Liquefied Petroleum

Gas),Gas Oil (Naphta) and Kerosene ,Aviation fuels (Avgas
and Jet A-1)
2. Lubricants
3. In addition to the provision of Fuels, Lubricants and other specialized

products like Modern Car wash, Lub change, Supermarket, Cafes and
Restaurant Services will be added by leasing out our premises to
companies that offer these services in Addis Ababa and Metehara
town.
Table Station growth plan of the Company

Golden station expansion plan
Year year year Year 4 to Year 8 to
1 2 3 7 10
company owned 2 1 1 4 2
Dealer owned 2 4 6 10 8
Total stations 4 9 16 30 40

3.2. Machineries and Equipments
The project requires the following machineries and equipments;
1. Petroleum Depot Equipments

 Diesel and Benzene Tanks
 Pigging Units
 Drum Decanters
 Filling Lines
 Filters
 Thermic Fluid Heatres
 Coolers/Heat Exchangers
 Testing Equipments
 Gantry
 Ethanol pump
 Pump and pipe
 Distribution system
 Laboratory equipments
2. Fuel Station Equipments
3. Other Equipments & Accessories
4. Office Equipments
 Office chairs
 Office tables
 Computer
 Printer
 Computer table with chairs
 Managerial Chair with table
 File Cabinet

 Office Shelves
 Telephone Set
 Decoration(Curtain & carpet)
 Micellaneous office Equpments
5. Vehicles
 Pick uo
 Mini bus
3.3. Civil Engineer Building and Civil Works
As indicated in part 1 the total land requirement for the project is estimated to be
5,409M2 for both sites. The area are planned to accommodate fuel station, depot, office
and other utility requirements as well as green areas and parking.
Company will construct 12X50,000 liter capacity horizontal tanks. The total capacity will
be 600,000 lit. The depot will have both loading and unloading facilities. On top of this
will have a fire fighting facilities.
Company will construct high standard fuel service stations in Addis Ababa Lebu area in
1,889m2. The station will have cafeteria, supermarket, Modern car washing facility and
other customer recreational services.
Company also will construct one new fuel station together with the Depot which will be
medium size. The station will also have cafeteria, supermarket and tyre service.
In general the buildings must be capable of being kept clean and provision should be
made for keeping the sewerages drained out properly and room temperature is attained
to keep healthy environment. In most environments, equipment should be totally

enclosed in a light structure: where the climate is suitable. A concrete floor, which can
be swept, is usual.
The site will be encircled by a chain linked fence fastened to concrete posts. The project
construction is designed by professional engineers and construction will be done under
close supervision and collaboration of the engineers.
3.4. Proposed Business Legal Status & Sharing
The proposed legal structure of the business entity in petroleum industry as a private
limited company in the nation.
The proposed petroleum, and lubricant Marketing and Distribution business. The
company is assumed to operate on as a private limited company as it is mandatory for
an oil or gas company to register as a private limited company.
3.5. Utilities
A number of utilities would be put in place in order to ensure smooth functioning of the
envisioned petroleum company. These utilities include:
 Water Supply (5,000m3)
 Supplementary Electricity supply (10,000KWH)
 Fuel (38,000 liters)
3.6. Project Implementation
The project's implementation is expected to take 8 months. The major activities include
Bank loan processing, construction of the building, cleaning the area around the
building, procurement of equipments and start rendering services. The time schedule for
the above mentioned major activities is presented below:
Table-Project-Implementation-Schedule
4. ORGANZATION AND MANAGEMENT
4.1. Organization and Management

The organizational structure should be in a way that the Petroleum Company can able
to achieve its objectives as well as the satisfaction of standard requirement.

4.2. Man Power

The total manpower required for the project will be 96 employees at full capacity.
 Permanent workers 84
 Skilled 50
 Unskilled 34
 Temporary workers 12
 Skilled 2
 Unskilled 10
The total number of manpower, Manpower list, qualification and salary are listed in the
table below.
Table - Manpower list, Number, Qualification and Salary of the project

SN Position No Qualification Monthly Annual Salary
. Salary in Br. in br.
I Permanent worker
1 General Manager 1 BA in Management 12,000.00 144,000.00
2 Acct & Admin head 1 BA in Acct/mgt 6,000.00 72,000.00
3 Marketing head 1 BA in Marketing Mgt 6,000.00 72,000.00

4 Operation Service head 1 BA in Management 5,000.00 60,000.00

5 Accountant 1 BA in Accounting 300.00 3,600.00
6 Cashier 3 10+2 in Accounting 2,000.00 72,000.00
7 Marketing Officer 3 10+2 in Sales and marketing 2,500.00 90,000.00
10+1 in purchasing and supplies
8 Purchaser 1 mgt 1,800.00 21,600.00
9 Store Keeper 2 12 completed 1,000.00 24,000.00
10 Guards 6 Basic 900.00 64,800.00
11 Janitors 7 Unskilled 800.00 67,200.00
12 Receptionist 1 10+1 in reception management 1,500.00 18,000.00
13 Driver 3 10 completed 1,200.00 43,200.00
Fuel depo, Car wash and Fuel station
14 worker 30 Basic 950.00 342,000.00
15 Assistant worker 21 Unskilled 700.00 176,400.00
16 Gardner 2 Unskilled 650.00 15,600.00
Sub-total 84 43,300.00 1,286,400.00

II Temporary Worker
2.1 Auto mechanic 1 Diploma in Automotive 1,800.00 21,600.00
2.2 Electrician 1 Diploma in Electricity 1,800.00 21,600.00
2.3 Laborer 10 Unskilled 850.00 102,000.00
Sub-total 12 145,200.00
Total 94 1,431,600.00
Benefit(20% of the basic salary) 286,320.00
Grand Total 96 1,717,920.00
4.3. Organizational Structure

The organizational structure of the project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be
manager with the responsibility of supervising the overall activity of the Petroleum
company. Depending up on the nature of the center and the amount of work to be
performs; there exist auxiliary units under the general manager.
Employees under each unit will be supervised by the department head that is
accountable for the general manager. General Manager is appointed by the owner.
Fig Organization Structure of the Petroleum project
Owner
General Manager
Service Admin and Finance Marketing

Management Dept. Department Department
Depot Fuel Station
A. The General Manager’s

The duties and responsibilities of the general manager are;
 He/she will plan, organize, direct and control the overall activities of the Petroleum
and fuel station.
 He/she will devise policies and strategies that will enable the organization profitable.
 He/she will plan, organize, direct and control the human and non-human resources
of the organization (other departments) so as to achieve the short and long run
objectives of the organization.


B. Service Management Department
This is the core department that has two main sections (Depot and Fuel station)
The main duties and responsibilities of this department are
 To render those outlined services of the project and manage the overall service
delivery system of the Petroleum and fuel station in line with the customer need and
satisfaction.
 He/she will incorporate modern technological innovation that will facilitate the service
delivery of the depot and blending services that will increase customer’s satisfaction.
C. Administration & Finance Department
The Admin & Finance Department of the Petroleum company is responsible for
undertaking the following activities:
 Manage the human resources and control employee’s activity
 Will manage non human resources of the organization, which include: effective
handling of the different inventories and devise strategies of controlling against fraud
and damage.
 Will provide the right material or inventory to the center with right price at the right
time.
 Will plan, organize direct and control the financial transaction of the building by using
all the necessary documents.
 Accountant and cashers that will collect money from the customers.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both
the General Manager and other concerned government body.
D. The Marketing Department

 Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
 Will develop the marketing strategies.
 Will develop effective customer handling strategies
 Plan and execute the promotion mix
5. FINANCIAL REQUIRMENT AND ANALYSIS
5.1. Total Initial Investment Cost

The total amount of money that is required to establish the envisaged project is
estimated to be Birr 45,560,000.

Table Total Initial Investment Capital

SN Description Cost in birr
1 Land, Building & Construction 26,493,000.00
2 Machines & Equipments 9,250,000.00
3 Vehicle 1,100,000
4 Office Equipment 500,000.00
Total Fixed Investment Cost 37,343,000
5 Initial Working capital 5,662,476
6 Pre service Expense 385,000
Total 43,390,476
Contingency (5%) 2,169,523.80
Total Initial Investment Capital 45,560,000
5.1.1.Fixed Investment
A. Land, Building & Construction

SN Description Land Unit cost in Br Total cost in Br.
Requirement(M2)
1 Awash Station
1.1 Petroleum Depot, tanker and facilities 1,320.00 6,000.00 7,920,000.00
1.2 Fuel station, Cafeteria, Shop and Car wash 850.00 5,650.00 4,802,500.00
1.3 Office 300.00 5,300.00 1,590,000.00

1.4 Loading unloading 500.00 2,250.00 1,125,000.00

1.5 Parking and Green area 550.00 2,150.00 1,182,500.00
2 Addis Ababa Station -
2.1 Fuel station, Office, Cafeteria, Shop and 1,100.00 6,193,000.00
Car wash 5,630.00
2.2 Parking, loading unloading and green area 789.00 2,200.00 1,735,800.00
3 Fence and site development 565,224.75
4 Design and Supervision
5 Electric and Water System Installation 950,000.00
6 Land lease Initial Fee 428,975.25

Total 5,409.00 26,493,000.00
B. Machinery And Equipment
SN Description UOM Oty Unit Price in Total Price in

Br Br.
1 Petroleum Depot and facilities Equipments Set 5 1,350,000.00 6,750,000.00
2 Fuel station Equipments Set 2 650,000.00 1,300,000.00
3 Other Equipments & Accessories LS 1,200,000.00
Table 9,250,000.00
C. Vehicles
SN Description Qty Unit Price in br. Total Price in br. Remark
1 Pick up 1 600,000 600,000 Duty free
2 Minibus 1 500,000 500,000 Duty free
Total 2 1,100,000
D. Office Equipments
SN Description Measurement Oty Unit Price in Br Total Price in Br.
1 Office chairs Unit 30 2,500.00 75,000.00

2 Offce tables Unit 15 3,500.00 52,500.00
3 Computer Unit 6 15,000.00 90,000.00
4 Printer Unit 3 5,500.00 16,500.00
5 Computer table with chairs Set 5 4,000.00 20,000.00
6 Managerial Chair with table Set 6 9,000.00 54,000.00

7 File Cabinet Unit 3 3,000.00 9,000.00
8 Office Shelves Unit 5 4,600.00 23,000.00
9 Telephone Set Unit 5 2,000.00 10,000.00
10 Decoration(Curtain & carpet) Set 100,000.00
11 Miscellaneous office Equpments 50,000.00
Total 500,000.00
E. Initial Working Capital

The initial working capital is estimated to be birr 5,662,476
F. Pre-Service Expense
SN Description Cost in Br.
1 Project proposal 25,000
2 Environmental Impact Assessment 50,000
3 Worker capacity building 100,000
4 Promotion and advertisement 200,000
5 Licensing fee and others 10000
Total 385,000
5.2. Annual Service (Production) Cost at Full Capacity

i. Raw Materials and Inputs
The total cost of raw materials and input is Birr 985,774,625 at full capacity which is 20
cents of profit margin per liter.
ii. Salary Expense
As indicated in part 4.2 (Manpower) of this study, the total cost of salary and wage is
estimated to be Br 2,440,972.80
iii. Other Operating Expenses
SN Description Annual Cost in br Assumption Used

1 Property Insurance 455,600.00 1% of Fixed Investment Cost
2 Audit & Legal Fee 42,000.00 Br. 3500 per month

3 Office rent 144,000.00 Br. 12,000 per month
4 Uniforms(worker cloth) 13,300.00 70*190br
5 Telephone, fax and postal 54,000.00 Br.4500 per month
6 Cleaning goods supplies 48,000.00 Br. 4000 per month
7 Repair and maintenance 911,200.00 2 % of the Fixed Investment Cost
8 Advertisement & promotion 250,000.00 Lump sum
9 Stationery and other office supplies 42,000.00 Br. 3500 per month
10 Electricity 67,500.00 0.75*150,000KW per year
11 Water 15,000.00 1.5*10,000m3 per year
12 Fuel 222,480.00 12360 lit*Br. 18 per year
13 Oil and lubricant 22,248.00 10% of fuel cost
14 Miscellaneous Expense 120,000.00 Br.10000 per month
Total 2,407,327.99
5.3. Financial Analysis and Statements
5.3.1.Underlying Assumption
The financial analysis of the envisioned Petroleum Company is based on the data
provided in the preceding sections and the following assumptions.
A. Construction and Finance
Construction period 4 months

Source of finance 30% equity and 70% loan
Tax holidays 2 years
Tax rate for Sole business 35% of the profit
Bank interest rate 10 %
Operating Costs Increase by 2%
Salary and wages increase by 3%
Operating Costs and raw materials Increase by 5%
Raw materials increased by 5%

B. Depreciation
Building 5%
Machinery and equipment 10%
Office furniture 10%
Vehicles 20%
C. Working Capital
Accounts receivable 30 days

Raw material local 30days
Work in progress 5 days
Finished products 30 days
Cash in hand 5 days
Accounts payable 30 days
5.3.2. Sources of Fund

SN Description % share Amount(in birr)
1 Owners Share 30 13,668,000

2 Bank Loan 70 31,892,000
Total 100 45,560,000
5.3.3. Loan repayment Schedule

Year Principal Payment Interest (10%) Total Annual Payment Remaining Balance
0 0 0 0 31,891,999.86
1 3,189,199.99 3,189,199.99 6,378,399.97 28,702,799.87
2 3,189,199.99 2,870,279.99 6,059,479.97 25,513,599.89
3 3,189,199.99 2,551,359.99 5,740,559.97 22,324,399.90
4 3,189,199.99 2,232,439.99 5,421,639.98 19,135,199.92
5 3,189,199.99 1,913,519.99 5,102,719.98 15,945,999.93
6 3,189,199.99 1,594,599.99 4,783,799.98 12,756,799.94
7 3,189,199.99 1,275,679.99 4,464,879.98 9,567,599.96
8 3,189,199.99 956,760.00 4,145,959.98 6,378,399.97
9 3,189,199.99 637,840.00 3,827,039.98 3,189,199.99
10 3,189,199.99 318,920.00 3,508,119.98 -

5.3.4. Depreciation Schedule

Original Value In Depreciation Depreciation Per
SN Description Birr rate in % year
1 Construction and Building 26,493,000.00 5 1,324,650.00
2 Machines & Equipments 9,250,000.00 10 925,000.00
3 Office Equipment 500,000 10 50,000.00
4 Vehicle 1,100,000.00 20 220,000.00
Total 37,343,000 2,519,650.00
5.3.5.Revenue Projection
Based on the production capacity and program of the Petroleum Company indicated in
previous (Chapter 2), the revenue of the organization projected as indicated in the table
below;
SN Description Measurement Annual Unit Price in Total price in Assumption
Production Birr Birr
1 Petroleum Products
1.1 Kerosene Liter 700,000.00 17.50 12,250,000.00
1.2 AGO (Diesel) Liter 29,750,000.00 17.65 525,087,500.00
1.3 MGR (Benzene) Liter 9,800,000.00 18.80 184,240,000.00
1.4 Lubricant and oil Liter 3,500,000.00 90.00 315,000,000.00

Sub Total

1,036,577,500.0
43,750,000.00 0
Fuel Station & Other
2 facilities rent
Fuel station and other Br. 70,000 per
2.1 facilities rent in AA Station _ _ 840,000.00 month
Fuel station and other
facilities rent in Br. 20,000 per
2.2 Awash Station - 240,000.00 month
1,037,65
Total 7,500.00
5.3.6. Balance Sheet

Asset
Current Asset Value in Br.
Cash 2,554,524
Inventory of raw materials and inputs 5,662,476.00
Total Current Asset 8,217,000
Fixed Asset
Land, Building and Construction 26,493,000.00
Machineries and Equipments 9,250,000.00
Office Equipment 500,000.00
Vehicle 1,100,000
Total fixed Asset 37,343,000
Total Asset 45,560,000
Liability
Account payable 31,892,000
Owners Equity
Capital 13,668,000

Total Liability & Owners’ Equity

45,560,000
5.3.7.Income Loss Statement
Revenue Year 1 Year 2 Year 3-10

Sales Revenue 622,594,500.00 830,126,000.00 1,037,657,500.00
Purchase of Raw Materials 591,464,775 788,619,700 985,774,625
Gross profit 31,129,725 41,506,300 51,882,875
Expenses
Salary Expense 2,318,924.16 2,196,875.52 2,440,973
Other Operating Expenses 2,407,327.99 2,407,327.99 2,407,327.99
Deprecation Building 1,324,650.00 1,324,650.00 1,324,650.00
Deprecation machine and Equip. 925,000.00 925,000 925,000
Deprecation office Equip 50,000.00 50,000 50,000
Deprecation Vehicle 220,000.00 220,000 220,000
Interest Expense 3,189,199.99 2,870,279.99 1,435,139.99
Lease payment 133,130 133,130 133,130
Total Expense 10,568,232.39 10,127,263.75 8,936,221.04
Profit Before Tax 20,561,492.61 31,379,036.25 42,946,653.96
Tax(35% ) 15,031,328.89
Net Profit 20,561,492.61 31,379,036.25 27,915,325.08
5.3.8.Cash Flow Statement

Year Year 0 Year 1 Year 2 Year 3-10
Equity Capital 13,668,000
Loan principal 31,892,000
Sale(revenue) 0 622,594,500.00 830,126,000.00 1,037,657,500.00
Total cash in flow 45,560,000 622,594,500.00 830,126,000.00 1,037,657,500.00
cash payment
Purchase of Raw materials & 0
Inputs 591,464,775 788,619,700.00 985,774,625.00
Salary expense 2,318,924.16 2,196,876 2,440,973
Investment 44,746,025 0 0 0
Other Operating cost 0 2,407,327.99 2,407,327.99 2,407,327.99
Pre operating cost 385,000 0 0
loan repayment 0 6,378,399.97 6,059,479.97 4,624,339.98
Lease payment 428,975.25 133,130 133,130 133,130
Tax payment 0
- - 15,031,328.89

Total payment 45,560,000 602,702,557.38 799,416,513.74 1,010,411,724.91

Cash surplus / Deficit 0.00 19,891,942.62 30,709,486.26 27,245,775.09
Cumulative Cash Flow 19,891,942.62 50,601,428.89 77,847,203.98
5.3.9.Profitability
According to the projected income statement, the project will start generating profit in
the first year of operation. Important ratios such as profit to total sales, net profit to
equity (Return on equity) and net profit plus interest on total investment (return on total
investment) show an increasing trend during the lifetime of the project.
The income statement and the other indicators of profitability show that the project is
viable.
5.3.10. Pay-Back Period

The investment cost and income statement projection are used to project the pay-back
period. The project's initial investment will be fully recovered within 3.2 year of
operation.
6. ENVIRONMENTAL IMPACT OF THE PROJECT
Currently the issue of environment and envelopment get due emphasis and thus every
citizen called exert their maximum effort for fighting against any negative impacts on the
environment so as to result in a win-win solution on common agenda that is creating
environmentally friendly business environment. Therefore, this Petroleum Company
project does not cause a negative impact on the environment.


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Feasibility Study on Establishment of Petroleum Company

PROMOTER- GREEN PETROLEUM DISTRIBUTOR PLC

1 G-two Investment & Environmental Consulting PLC

4.3. Organizational Structure............................................................................................................36

4 G-two Investment & Environmental Consulting PLC

The government of Ethiopia has developed a conducive investment policy packages

1.1. Objective of the project

The main objective of this project is to establish a standard petroleum distribution

1.2. Socio-Economic Significance of the Project

1.2.1.Provide better service

6 G-two Investment & Environmental Consulting PLC

1.2.4.Benefit for Local Community

1.2.5.Stimulate the Local Economy

7 G-two Investment & Environmental Consulting PLC

1.3. Location and Premises Required

The coordinate of Addis Ababa fuel station and facilities site is

The coordinate of Awash Depot and fuel station site is

8 G-two Investment & Environmental Consulting PLC

. The main justifications behind the selection of this location are:

Table. Premises required and land use plan

SN Description Land Requirement(M2) Remark

Layout Plan for Awash Site

10 G-two Investment & Environmental Consulting PLC

2. MARKET STUDY AND CAPACITY

2.1. Market Study

2.1.1.Overview of Petroleum Industry in Ethiopia

2.1.2.1. Demand factors

 Performance of the national economy;

Accordingly, a throughout assessment of current status and future prospect of these

1. Performance of the National Economy

In Ethiopia as a result of the appropriate policy (investment policy) adopted by the

Table : Percentage Share Of Ethiopia’s GDP In Each Sub-Sector

Positive performance of the Ethiopian economy is expected to continue in the future.

16 G-two Investment & Environmental Consulting PLC

2. Construction Sector Performance

17 G-two Investment & Environmental Consulting PLC

2005/06 11,074 301,085

Source: NBE 2014 Annual Report

Figure: Growth of Construction Sector and Ethiopian Economy (GDP) at Constant

18 G-two Investment & Environmental Consulting PLC

Source: NBE 2014 Annual Report

The positive performance of the Ethiopian economy is expected to continue in the

3. Population Growth And Urbanization

19 G-two Investment & Environmental Consulting PLC

Because of the backwardness of the agricultural practice and diminishing return of

2.1.3.Supply Analysis - Petroleum Products

20 G-two Investment & Environmental Consulting PLC

21 G-two Investment & Environmental Consulting PLC

22 G-two Investment & Environmental Consulting PLC

Table: Volume of Petroleum Imports in Metric Ton

23 G-two Investment & Environmental Consulting PLC

24 G-two Investment & Environmental Consulting PLC

In 2018, there exist 19 petroleum distributor companies in Ethiopia.

1) Total Ethiopia Sh.Co.

4) Yetebaberut Beharawi Petroleum Sh.Co.

2.2. Plant Capacity and Production Program

Table Company capacity and production program

SN Description Measureme Daily Service Capacity Monthly Service Annual Service