Factors Affecting Petroleum and Petroleum products Distribution Practices of National Oil Company (NOC) in Ethiopia

Abstract

This study was aimed at analyzing factors affecting petroleum and petroleum products distribution practices of National Oil Corporation (NOC) in Ethiopia with specific objectives of examine distribution practice challenges in the National Oil Company (NOC) in the country. The data were obtained from both primary and secondary sources. The primary data for this study were collected from National Oil Company at head office and some branch offices selected purposively. Nine (9) Truck transporters and fifth in (15) petroleum dealers and 19 consumers selected by using random sampling procedures. Petroleum and Energy authority(PEA) fixed profit margin for Petroleum companies, Truck Transporters and dealers are different according to their distribution practices activities and these profit margin was assigned before 5 years, due to current the country economic growth and devaluation of Ethiopian currency petroleum distribution actors profit margin become very low than previous. It is clear that the NOC, truck transporters and petroleum dealers are not benefiting from the petroleum them distribution. Farther more the whole petroleum and its products distribution practices is governed by Ethiopian petroleum Supplies Enterprise. The result of the multiple regression models indicated that volume of petroleum distributed is positively and significantly affected by, utilization of credit, dealers owned gas station, access to market information. Therefore, policies aiming at increasing distribution practice of the NOC Company improving and increasing credit provider institutions and arranging special kind credit facility, facilitating and improving access land for construction of dealer owned gas station, improving, integrating and easily accessing market information to update petroleum and its products distribution practice. Distance from petroleum source is negatively and significantly affected thus improving the current road quality and constructing petroleum pipeline to reduced transport cost in future are recommended to accelerate the distribution development