Forex crunch linked to lubricant shortage in Ethiopia

International and local oil distribution companies have been reported of being unable to import motor oil and grease due to the dearth of foreign currency. According to The Reporter-a local news outlet, shortage of lubricants and motor oils is now being experienced in many parts of the country.

Moreover, motorists are now complaining of being subjected to inferior quality lubricants being sold by dealers operating across the capital, Addis Ababa. Such operations could lead to an easy breeding ground for illicit traders to flood the market with fake and substandard lubricants which unsuspecting end-users buy much to the detriment of their vehicles and machinery.

A senior executive of Total Ethiopia told The Reporter that his company has been facing challenges in accessing foreign currency for the import of lubricants. “The banks are not availing foreign currency for the import of lubricants and there is a critical shortage of lubricants at the moment,” the executive said.

Managing director of Gomeju Oil Ethiopia, Tewodros Yeshiwas, told The Reporter that oil companies have been unable to secure foreign currency for the import of lubricants since August 2018. Tewodros said his company was unable to secure foreign currency from the local banks for the past several months.

Tewodros said that in recent months the local banks – including the Commercial Bank of Ethiopia; are unable to avail foreign currency. “We easily penetrated the local market as Petronas lubricants are globally recognized high-quality products. But unfortunately, we are not getting foreign currency to import the products which have high demand in the local market,” Tewodros said.

The situation in Ethiopia has been influenced by a number of factors among them being the absence of local blending plants. However, some OMCs have expressed interest to set up plants among them Gomeju Oil Ethiopia in partnership with Petronas as confirmed by Tewodros.