The Oil and Energy Authority has announced an indefinite suspension on the construction of new gas stations in line with a recent government directive.
The decision was disclosed during a forum held on October 15, 2017 E.C. (October 25, 2024) to review the fuel market share formula and the fuel distribution operating system, which brought together key representatives from fuel supply companies.
During the session, the Authority’s Deputy Director General, Ato Dibara Fufa, stated that “new companies will remain where they are,” adding that the government has decided to halt the issuance of new construction permits, except for a few projects previously approved. He emphasized that existing gas stations should be utilized more efficiently instead of allowing further expansion.
Regional leaders attending the forum also indicated that the government had issued clear directives for regional administrations to withdraw from direct control of fuel-related activities.
For his part, the Authority’s Director General, Dr. Destawe Mekwant, clarified that the suspension applies to all new projects, except for about nine stations that meet specific criteria. These include areas without any existing gas stations, highly congested urban zones, locations where stations were demolished due to road corridor development, and underserved regions not affected by fuel smuggling.
According to Dr. Destawe, these exceptions were carefully reviewed by a special committee and approved by the Prime Minister’s Office.
He further noted that no additional construction permits would be issued until the country’s fuel supply and distribution connectivity improve, underscoring that the current decision is final until the sector’s challenges are resolved.
“We have detailed data from all regions regarding ongoing gas station constructions,” Dr. Destawe said. “Once the existing structural and logistical problems are addressed, the issue of new construction will be reconsidered.”
However, representatives from two oil companies, who spoke to The Station on condition of anonymity, expressed strong dissatisfaction with the decision. They argued that millions of birr invested in partially completed projects now face the risk of being wasted.
The companies also cited the Petroleum Products Trading Proclamation No. 1363/2017, ratified by the House of People’s Representatives, which legally permits the establishment of gas stations. They contended that the blanket suspension contradicts the law, and urged the government to reconsider, emphasizing that expanding gas station infrastructure is vital for public service and economic growth.