Ethiopia to import oil from Sudan

Ethiopia is to import oil from Sudan which could save the country up to US $7 million per year, the Ethiopian Petroleum Enterprise has announced. The imports – which should help reduce the massive cost of oil imports to the country – are expected to start this month. Some 50 percent of Ethiopia’s export earnings are spent on serving the nation’s demands from fuel. The Ethiopian Petroleum Enterprise is the only organisation that supplies oil in Ethiopia, storing the oil in Djibouti. General Manager Yigzaw Mekonnen said the country must to look at diversifying from relying on a single port like Djibouti. Ethiopia used to operate its own refinery in Eritrea but both countries have been at loggerheads since their two-year border war which flared up in 1998. Some 85 percent of Ethiopia’s demand for benzene will be imported from Sudan. Mekonnen announced that that Ethiopia would begin importing 10,000 mt of benzene monthly and 120,000 mt annually from its neighbour. A further 3,000 mt of diesel fuel each month will be shipped in, the petroleum official said. The diesel fuel import is expected to cover about 20 percent of the country's consumption. Currently Ethiopia imports around two million tons of oil costing around US $221 a year – mainly from Saudi Arabia and the Gulf states. It is expected that a total of US $7 million each year can be saved by Ethiopia in shipping the oil through Sudan. Ethiopia and Sudan signed a cooperation agreement in June last year enabling Addis Ababa to import fuel. Under the terms of the deal, Ethiopia has received 25,000 square metres of land in Sudan for the construction of a fuel depot. The country is also looking at the development of oil and gas as a means of shifting away from reliance on hydroelectric power. It has been claimed in recent months that the current drought has hit water supplies at the hydroelectric plants and led to current regular power cuts in Addis Ababa. The potential of hydroelectric power in Ethiopia is enormous. So far the country utilises around two per cent of the total.