DETERMINANTES OF FUEL DISTRIBUTION EFFECTIVENESS IN ETHIOPIA

Abstract

The purpose of this study was to identify factors that affect Ethiopia’s fuel distribution effectiveness. Both descriptive and explanatory research designs were used in this study. The researcher employed both quantitative and qualitative research methods. The population of the study was divided in to two strata. The first stratum contained the 38 fuel distributor oil companies which perform the wholesale distribution of fuel in Ethiopia and the second strata contained 1237 retail fuel stations found in Ethiopia. Out of the 38 fuel distributors, 10 companies that have a market share of 1% and above were selected from the first stratum by using purposive sampling technique.110 fuel stations found in Addis Ababa were selected from the second stratum through convenience sampling technique. A structured questionnaire was employed as a primary source of data by the researcher. Out 120 questionnaires distributed, 96 were returned which representing a response rate of 80%.To describe the extent of the relationship between the variables of interest, a correlation and regression analysis was used. Additionally, descriptive statistics (such as mean and standard deviation) and the Statistical Package for Social Scientists (SPSS) version 20 were utilized to evaluate the data. Tables and figure were also employed to present the study's findings. Integration, experience, fuel stations location and financial capacity are variables that have positive and significant impact on the country's fuel distribution effectiveness, The findings also shows that the most significant influences on distribution effectiveness is due to financial capacity and integration followed by experience and fuel stations location. Disintegrated processes, lack of experience, land accessibility problem and inadequate financial capacity of the key distribution chain actors are main reasons for the country’s ineffective fuel distribution system identified by the study. If the country wants to improve its fuel distribution, the study's findings suggest that integration, experience, fuel stations location and financial capacity must be prioritized.