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Saturday, July 31, 2021

Fuel pricing: Why Kenya should learn from Ethiopia

By Muhammed Hersi

Must read

While Kenyans always like looking at Uganda and Tanzania, the two countries both enjoy a lower pump price yet the former is even landlocked and their oil has to go through Mombasa where we pay more as a motorist for the same litre of fuel.

Now a benchmark that has deliberately been ignored is our Northern neighbour Ethiopia. They pay less than Ksh60 for a litre of petrol while we pay Ksh120 plus.

Ethiopia is totally landlocked, we are not. Ethiopia has to use the port of Djibouti and in future Berbera in Somaliland.

It is said information is power but that was 20 years ago, these days information is power if only you use it in a productive way.

Why is Ethiopia able to deliver fuel at less than half of what we pay, yet the country is totally landlocked.  Now I understand why my cousins in Moyale prefer to cross to Ethiopia side to fuel.

When you look at the table Ethiopia it is even able to sell fuel to its people cheaper than United Arab Emirates (UAE) and just about to beat even Bahrain then you wonder why manufacturers are headed there.

I am sure many of you may also not know that Ethiopia has one of the lowest electricity costs in Africa and even globally.

You see Ethiopia in their syaywhgy consider Fuel and Energy us critical factors for the success of any manufacturing dream. Simple economics is that you don’t heavily tax enablers, you only do that in a matured economy like Europe.

You see we think speaking queens English and looking sophisticated is enough to make us superior to our neighbours. 

While Ethiopia may have had challenging past they are positioning themselves as the China of Africa. You see China is not able to cope with demand and they are looking at off-loading low yield manufacturing so they are looking for developing country that can do that and which is the easiest and ideal place ? Your guess is as good as mine.

In Ethiopia with such low cost of fuel and low cost of electricity then what is left is trained personnel and again China and other countries are helping them do that.

Don’t even bother with Europe as a benchmark…… think hard about Ethiopia. 

Ethiopia is home to Ethiopian Airlines.

They are also known for world class leather products. Looks like we will be left speaking only good English.

Chinese speak no English and they don’t pretend to be sophisticated but they supply the world from Gucci accessories to Apple products and myriad of pharmaceutical products.

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