Ethiopia to Inject Capital into Ethiopian Petroleum Supply Company

The government plans to increase the capital of the Ethiopian Petroleum Supply Company. This decision comes in response to losses from the market-driven foreign exchange trading system and the company’s commercial loan debts.

Alemayehu Tsegaye, a senior public relations officer at the company, confirmed the government’s commitment to this capital increase. However, the proposal is still pending approval. Therefore, the exact amount of the increase is not yet known.

The government aims to help the Ethiopian Petroleum Supply Company reduce its debts and losses from foreign exchange reforms. It has informed the International Monetary Fund (IMF) about these plans. Since its establishment on July 22, 2016, the company has faced estimated losses of 120 billion birr due to the foreign exchange trading system.

Since July 2016, the government has allocated $670 million at previous foreign exchange rates. This funding will help the company meet fuel consumption needs for three months. The National Bank of Ethiopia directed this action. Alemayehu confirmed that the funds have been transferred to their bank account, and purchasing activities are now underway.

In July 2016, it had to subsidize oil product prices to prevent inflation during foreign exchange reforms. According to an agreement with the IMF, these subsidies include a monthly price increase of five percent and cannot last more than one year.

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