The federal government adjusted profit margin for businesses involved in the distribution and sales of petroleum products.
It comes following years of plea by oil suppliers and dealers that have been requesting the government to adjust the margin, citing the low profit from they make from sales of oil is not enough to cover their expenses.Though it is yet to be announced, the adjustment will see the profit margin of oil supplier and gas stations from below one percent from every litre to five percent of their total cost, including administrative expenses. The council of minister has already approved the new margin, though industry insiders are yet to be communicated how much the amount exactly would be.
There are almost three dozens of oil suppliers in Ethiopia, with the biggest market players being Total, Oil Libya and National Oil Corporation (NOC). Though the number of oil suppliers tripled in the last five years, few have been successful in making profit, with many new entrants reporting loss for years. Industry players make profit from sales of lubricants, despite making a huge amount of revenues from oil products.
