INVESTMENT PROJECT PROPOSAL ON:

ESTABLISHMENT OF GAS STATION IN

MIESO WOREDA OF DENGEGO AREA
SUBMITTED TO : EAST HARARGHE INVESTMENT OFFICE

PROMOTER: NAHILI PLC

JANUARY,2023

Page
 Summary of Project Profile
SN
1 Project Name
2 Project Owner
3 Gas Station Type
4 Project Location
5 Total Area of the Project
6 Land Use
7 Business Types
8 Investment Permit
9 Legal Status
10 Total Cost of Investment
11 Technology Use
12 Source of Fund
13 Employment Opportunity
Project Profile
Description
Nahili PLC Gas Station
Mr. Nahili PLC
Nile Petroleum
Mieso Woreda, Dengego Area
5,175 M2
 A petrol filling station (Fuel Pump
Area), 50mx50m = 2500m2
 Shopping Area 15mx10mx3= 450m2
 Service Area 10m x 5m x2= 100m2
 Green Area = 1500m2
 Parking Area 100m2
 Offices = 4mx5mx5= 100m2
 Toilet, 3x4mx3= 36m2
 Pavement 100mx4m=400m2
P.L.C
East Hararghe Zone Investment Bureau
Legitimate
Birr. 37,361,750
Apply a modern construction techniques
30% Owner’s contribution and 70% loan
from IFB (Interest free Banking)
 50 Temporary during construction
 25 Permanent after construction
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 Table of Contents

EXECUTIVE SUMMARY.........................................................................................................................1
1. INTRODUCTION...............................................................................................................................2
1.1 General Objectives of Projects......................................................................................................3
1.1.2. Specific objectives...............................................................................................................3
1.2 Mission..............................................................................................................................................3
1.3 Keys to Success.................................................................................................................................3
1.4. Company Summary..........................................................................................................................3
1.5 General Background of Mieso District..............................................................................................4
1.6. Infrastructure.................................................................................................................................4
1.7. Physical Setting of Influencing Areas...........................................................................................5
Administrative linkage;.............................................................................................................................5
Transport linkages;...................................................................................................................................5
Recreation and tourist related impacts.........................................................................................................5
2. TECHNICAL ASPECT OF PROJECT..................................................................................................6
2.1. Underground Storage Tanks (UST)................................................................................................6
2.2. Construction.................................................................................................................................6
2.3. Fire Fighting Protection..............................................................................................................7
2.4. Waste water Management..........................................................................................................7
2.5. Fill Pipes......................................................................................................................................7
2.6. Licensing Procedures.................................................................................................................7
3. ENVIRONMENTAL IMPACT ASSESSMENT OF THE PROJECT............................................8
3.1. Socio-Economic Environment......................................................................................................8
3.2. Environmental Impact Assessment..............................................................................................8
4. ORGANIZATIONAL STRUCTURE.......................................................................................9
5.1, Cost Structure................................................................................................................................10
5.2. Source of Finance.....................................................................................................................10
5.3. Initial Capital............................................................................................................................10
5.4. Utility Expenses..........................................................................................................................11
5.5. Depreciation cost.........................................................................................................................11
5.6. Administrative (Building management expenses)......................................................................11
5.7. Other Miscellaneous Expenses...................................................................................................11
6. MARKET ANALYSIS SUMMARY....................................................................................................12
6.1. Strategy and Implementation Summary............................................................................................12
5.1 Land Use Plan of Project.................................................................................................................12
6. SALES STRATEGY.....................................................................................................................13
4.6. Projected Profit and Loss................................................................................................................17

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 JAMAL DAWUD GAS STATION

EXECUTIVE SUMMARY

Ethiopia, at the moment, is a net importer of petroleum products. It spends over 50% of its total
export earning to meet nation’s fuel demand. It imports 1.7 billion USD mineral fuels including
oil. White and black petroleum products are imported directly by the Ethiopian Petroleum
Enterprise (EPE) through third party suppliers. Upon receipt from third party suppliers. EPE stores
the products at Horizon Terminal in Djibouti and then distributes the different grades mainly
Gasoline (Benzene). Gas Oil (Naphta), Kerosene, Light fuel oil, Heavy fuel oil and Jet fuel to Oil
companies such as Total, NOC, Oil Libya handle distribution, and these companies distribute the
fuel through a fixed margin structure set by the government. Ethiopia's major source of commercial
energy is crucial to the functioning and growth of the economy.

There are 38 oil companies in Ethiopia. Some of these oil companies are Total Ethiopia, NOC,
Oil Libya, Kobil, Dalol, TAF, Nile petrol, Gomeju oil etc. These companies have distributed
the petroleum products for around 930 fuel stations operating in Ethiopia. Also these fuel
stations have provides fuel for 1.3 million registered vehicles and Serving 120 mil- lion
peoples.
There is no sufficient fuel station in Ethiopia. The existing few fuel stations are concentrated
in urban centers. The Ethiopia petroleum Supply Enterprise (EPSE) is planning to build 160 petrol
stations to address fuel station shortage in the country.
Founding on the main high way to Addis Ababa In the project location of Mieso Town only one Fuel
Station is existed providing services for thousands customer daily with huge gap of demands. Thus, this
project will create job opportunity for 50 temporary during construction of project and also 25
permanent jobs for surrounding community and unemployment.

The project will own its defined organization structure and management set up. The organization has
different sections and hierarchical arrangements. It will encompass trained, semi trained and skill workers.
The total man power of this project is expected to be 75.The total indicative cost of the project is birr.
37,361,750ETB out of this birr 20,000,000 ETB will be the cost of Gas station Building while birr
6,786,768.09ETB is required for working capital.

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1. INTRODUCTION
Energy play significant role for the development of any country’s economy. It is the
backbone for sustainable development of any economic and social sectors as well.
The Ethiopian economy has grown stronger as the transition from a command to a market-
based economy takes place. The former system of price controls has almost been discarded, the
tax rates have decreased, and several private sector restrictions have been removed. Progress
has been made on the implementation of reforms. The import tariff regime has been reformed.
The financial sector is also improving, with flexible interest and exchange rates that are market-
determined. Ethiopia belongs to the COMESA agreement. Member countries enjoy
preferential trade terms. Ethiopia has similar agreements with a number of countries and the
EU.
During the implementation of the two Growth and Transformation Plans (GTP I and II), Ethiopia
has registered rapid and high economic growth. Based on constant basic prices (2015/2016 base
year), Gross Domestic Product (GDP) grew on average by 9.2% per year and the volume of real
GDP rose from Birr 828 billion in the 2009/10 fiscal year to Birr 1.99 trillion in the 2019/20
fiscal year. Compared to an average of 11% annual growth target during the period, the actual
growth performance fell 1.8 percent- age point short of the target. When the economic growth
performance is disaggregated into major economic sectors, agriculture, industry and ser- vices
have respectively registered an average annual growth rate of 5.3%, 17.2% and 9.7%

In the next development plan regarding with transportation sector the main targets have been laid
out to successfully achieve the principal ob- ejectives of the transport subsector development plan
for the coming ten years (2020/21-2029/30) to expand road transport infrastructure the
government plant to build:-102,000 km new roads, raising the overall national road network from
144,000 km to 246,000 km, upgrade the standard of 28,000 km existing roads, increase the
total length of expressways from 301 km to 1,650 km, increase the total length of the rural
roads built through the “Universal Rural Roads Access Program” (URRAP) from 56,000 km to
109,000 km and raise the proportion of roads in good condition from 58% to 87%. Also to
expand transportation services the government will raise the number of truck terminals from 1 to
23, increase the number of dry ports from 8 to 11, build 1,000 product and input storage
centers

Currently the Russia and Ukraine conflict that affect the world Economy and an Ethiopian civil
war, both conflicts have their own contribute for the current sky rocketing inflation. However,
recently, Ethiopia is following a real market oriented economic policy that encourages active
participation of private sectors in the national economy.

In recent years, huge investment activities are taking place through- out the country which is
proved for the correct development policy chosen by the government. In this regard, the chosen
development policy has enable Ethiopia to achieve double digit economic growth in which
investment in private sectors has significant contribution. Though huge investments activities are
underway, what is so far embarked on is little compared to the potential of the country. Especially,
the basic infrastructure under construction like Millennium Dam, long distance rail ways, high way
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asphalt road and other plan for further development will enable investors to invest on many
different investment sectors. Moreover, the recently initiated the prosperity party ten years
development plan and development commitment from the government side is found other
encouraging factor. There- fore, by considering the conducive and encouraging investment policy
created, the existing investment opportunity and the call made to the domestic investors and
Ethiopian Diasporas by government to actively participate in the Growth and Development Plan of
the country. Hence Mr. Nahili PLC is an Ethiopian investor born in east Harage zone decided to
benefit from investment opportunity created in the country by exploiting his resources.
Accordingly, he came up with the idea of constructing a huge Gas Station with G+1 building

1.1 General Objectives of Projects

The project is designed to build Gas Station with G+1 multi use building complex that
consists:- A petrol filling station that have five underground storage tanks and each petroleum
product sold at the station with a mini- mum capacity of 100,000 liters, one digital dispensing
pump (two-way) for each petroleum product sold at the station, One service bay , One wash
bay, One generation Offices, One wastewater drainage system and Fire fighting equipments.
Also it consists modern Gar wash, Lubricants, Supermarket and Cafe.

1.1.2. Specific objectives

 To capture an increasing demand of the Gas station
 To offer services of gas station, at an affordable price.
 To create job opportunities for Mieso city community.
 Fill the gap for ever increasing demand for fuels in the areas.

1.2 Mission
The mission of Nahili PLC 's Gas Station is to offer customers on Highway from Addis to East and
south competitive gas prices. The company will make a healthy profit for its owners and provide a
rewarding work environment for its employees.

1.3 Keys to Success

 Good quality products at competitive prices.
 Excellent customer service that will promote customer loyalty.

1.4. Company Summary

Nahili PLC 's Gas Station is a new convenience store and gas station in Mieso woreda of Dengego Area.
Nahili PLC , owner of Nahili PLC 's Gas Station, has several years of experience in managing gas
stations. Nahili PLC will focus on the providing fuel for various vehicle that pass through the town
daily. Nahili PLC 's Gas Station will offer its customers the best gas prices and related services like cafe,
car wash supermarket.

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1.5 General Background of Mieso District

Mieso district is one of the east Hararge zones which are laid between 9014’3’’N latitude _9007’07’’E
longitude. The altitude of this district rages between 1600-2797m.This districts found to the southwest
of zonal town (Harar). Mieso is the district capital. 65% of the district is plain area and the remaining
35% are hilly and mountains. On the other hand, 91% of the district is Badda dare (middle land) while
7% are high land (bada) only 2% are desert. Mieso is bordred on the south by bedeno, on the west by
metta, on the north by dire dawa on the northwest by haromaya and on the southeast by kurfachale
Maize, sorghum, wheat, coffee, chat and teffs are mainly produced in the district. The total area of
district estimated to be 45,670ha of which more than 50% are cultivable the major soil types are black
which consists more than 76%.

In this district according to the Ethiopian census of 2007GC there are more than 146,480 populations of
which 74,789 are males and the remaining 71,691 are females on about 30 famer association and 3
towns, this figure raised to 205,628 of which 103,407 are male while the remaining 102,221 are female
in year 2014. Data from the district shows that, more than 31,875 farmer household in the district .Data
from agricultural office also shows that, there are more than 183,482 livestock and 171,499 poultry

It was found at the distance of 5km from district capital Mieso and 45km from zone capital (harar),and
465km from Finfine. This town is believed to be established as the center before 1916 E.C mainly due
to its foundation on the main road to Addis Ababa. This area is known by the existence green and
Langey Lake though it’s seasonal. This town has been serving the surrounding area for various services
such as education, health, administrations, markets and others.

1.6. Infrastructure

Road: Healthy development of any urban centre basically requires well-structured transport
infrastructure or network of roads and effective services of transportation. This includes selection and
development of the most important modes of transportation and related services. The development of
infrastructure and services of transportation promote an effective use of resources, with environmentally
sound solutions and safe traffic mobility. The other importance of transport infrastructure is its
contribution to the reduction of urban air pollution. Apart regulating the use of fuel and emission from
gasoline engines, promoting faster mobility of traffic reduces pollutions and other problems of
congestion.

The Mieso District found on main road to Addis Ababa have more than length of 50 km with different
hierarchy and types and extended to different parts of the city with 4.5km of asphalt and gravels roads.
Other than this, the city is connected to surrounding regions, other parts of the country and neighboring
countries with gravel and asphalt roads. Therefore, the area is internally and externally accessible and
has proper links

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Electricity: : The major source of District electricity supply is the connected lines of the national grid
system, Based on the 200m2 transformer coverage assumption, the total coverage of electricity in the
built up area of the city is estimated 83.3 %. The inner part of the city has more access than the
expansion areas. As this project will be established in the vicinity of city, power access will be better,
from connected line.

Communication: The GSM prepaid and post paid users, fixed telephone users, Dial up internet users.
Both private and business users have the larger number of the constituents. The provider of this service
is Telecom Ethiopia at a fair price. The existing service providing capacity is also higher to
accommodate diversified Telecom users. Therefore, Telecom service is accessible to fulfill the project
requirement to the standard. Beside this there is one old post office serving the city for long time.
Service Facilities: The major services required by the project includes, transport, training, financial, and
market aspects. The city is highly benefiting from both freight and passenger transport services rendered
to different parts of the country and to the neighboring counties. Therefore, there is proper accessibility
for impute market and expanded product disposal points.

Labor Force Potential Labor is an important element of the project requirements. The unemployment
situation of district is higher compared to the situation of the major towns of the country and the overall
country total. Currently the unemployment rate of Mieso Town is estimated at 16.9 %. This includes
educated unemployed too. Therefore, the job seeker has significant number. On the other hand there are
numerous public and private training centers engaged in offering different short and medium term
technical trainings.

The labor mobility to the city for seeking better opportunity was experienced from the surrounding
areas, the hinterlands and from other parts of the country. Therefore, the labour market is considered to
be competitive and the potential is found to be better. In general, it is accessible to obtain trained, semi
trained and untrained man power within the city with a required size. Out of total population 48% are
working forces between the ages of 15-65 showing high and cheap labour potential.

1.7. Physical Setting of Influencing Areas

Influence area/region is a geographic space that has strong linkage with a given city/town in terms of
administrative, economic, social services, transport, etc. catchments. In short it is a surrounding area of
an urban centre from which inhabitants get the above-stated services from the given city/town or vice
versa. In delineating influence area of a city/town participatory approach of various stakeholders
(municipal administration, woreda/zonal administrations, service providers such as education, health,
transport, etc) is mandatory. The stakeholders have to participate and arrive at a decision in delineating
the influence area; and this could be supported by using matrix, as deemed necessary. Geographical
proximity is one of the factors as far as linkage is concerned. Major parameters that need be considered
in the selection of influence areas are:

Administrative linkage;
Economic linkages (market catchments, tourist attractions, banks, etc)
Social Service catchments (education, health, etc);
Transport linkages;
Environmental linkages (pollution, supply of construction materials, woods, water, etc
Recreation and tourist related impacts
Accordingly, areas with strong linkage such as, Dire Dawa Administration (Free Trade Zone), Kulubi,
Harari Regional State, Somali Regional State, are among highly influencing areas with strong linkages.

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2. TECHNICAL ASPECT OF PROJECT

The Gas Station will have four underground storage tanks which means One thanks for
each petroleum product sold at the station. Each storage tank has a minimum capacity of
100,000 liters. Also it will have four digital dispensing pump (two-way) i.e one dispensing
pump for each petroleum product sold at the station. All dispensing pumps should be
covered. Moreover it will have one service bay, one wash bay, one generation Offices, one
wastewater drainage system and Fire fighting equipments.

2.1. Underground Storage Tanks (UST)

The Gas Station petroleum storage tanks and filling stations be licensed and regulated to confirm
with minimum standards that meet basic safety, health, operational and environmental
protection. A minimum distance of 10 m will be maintained between UST and dispensing
pumps. Also UST will be installed at a minimum distance of 10 m from front plot boundaries.
All vehicles should not be allowed within 2 m from the outer edge of the UST.

Chart-2 Storage tankers

2.2. Construction
The construction work will be carried out by a well known and experienced domestic
contractor. The construction activities considered the following idea:- All storage tanks at retail
dispensing sites will be placed underground and the tank shall have a protective coating. As a
minimum requirement, the tank shall be painted with a primer, and then coated with epoxy,
coal tar epoxy or similar bituminous coating. Where the water table is high, additional
protective coating measurement must be undertaken. Also before construction of UST, filling
stations and storage tanks is per- mitted an environmental impact assessment will be done by
professionals.

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Moreover a site soil analysis should be done to determine the type of soil, density, resistively
bearing pressure and depth of water table. Where aggressive soils have been encouraged and
where the water table is high, cathodic protection should be used for single steel walled tanks.
Other- wise, secondary contained tanks, i.e. a double-walled steel tank, double walled fiberglass
or jacketed steel tanks (with high density polythene or fiber glass outer wall) should be used.
And Suitable sand shall be used for both bedding and backfilling of steel tanks. Installed tank
and pipe work shall be hydrostatically tested.
UST to be located so that delivery trucks do not unduly block forecourt traffic. Also its
location to allow trucks to reach all fill pipes using normal hose length. Also its location to
provide a forecourt gradient that allows complete drainage of delivery truck compartments, to
allow minimum maneuvering of truck before and after delivery including ability to exit in
forward direction. Moreover the UST shall be installed to avoid traffic load and should be
sufficiently protected from traffic by using barriers and Placement of UST under canopy
should be avoided.
2.3. Fire Fighting Protection
In addition to measures mentioned UST, fire water storage and supply shall be sufficient to give
at least 6 hours of cooling water cover in case of fire. Fire foam system shall provide protection
to fire vulnerable areas (tank loading rack, etc.). Water system shall be installed around GFT to
ensure safeness in case of fire outbreak. The station will have fire extinguishers, which consist at
least two of 9kgs of chemical powder, will be available at the site. Also No smoking and no
cell phone usage signs will be significantly displayed in the forecourt.

2.4. Waste water Management

The forecourt should be designed with drain channels to capture all wastewater from the
forecourt, wash bays and service bays. The wash water will be directed to a suitably designed
three chamber oil interceptor to separate oil before the effluent is permitted to flow in public
storm water system. Effluent going into the public waterways should be monitored regularly and
records maintained to ensure that it does not exceed the required limits.

2.5. Fill Pipes

All direct fill pipes will be of the same diameter as the outlet of the fuel delivery truck and each
tank should have its own fill pipe and the size of the fill pipe should correspond to the size of
delivery truck outlets. Also at the fill point the pipe shall determine with a tight fill adapter and a
lockable fill cap. A spill containment device such as a stump will be fitted at the fill point to
prevent spill soaking directly into backfill and contaminate the ground. Fill point sea caps should
remain securely locked at all times to prevent unauthorized tampering with the products.
Periodic environ- mental audits will be performed by the project owner.
2.6. Licensing Procedures
Based on Articles 4-5 of a Petroleum Products Supply Operation Proclamation no. 838/2014
and Article 5(2), 5(8) and 5(20) of regulation no. 521/2022 the regulation set to determine
organization, powers and duties of petroleum and energy authority council of ministers all
new petroleum products retail station must be Receive Competency Certificate from

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Petroleum and Energy Authority then the petroleum products retail station meet the
requirement to start operation. The following are licensing pro cedures:
 An application for certificate of competence will be submitted for Petroleum and
Energy Authority
 The site Plans and drawings that shows site location, site size, structures and traffic flow
will be submitted.
 Investment license will be submitted.
 Business plan will be prepared.
 Petroleum Facility Construction Permit
 Environmental impact assessment
 Café and Supermarket trade license
 Procurement of equipment and fuel
The above documents will be reviewed and approved by Petroleum and Energy Authority
and the certificate of competence granted for owner.

3. ENVIRONMENTAL IMPACT ASSESSMENT OF THE PROJECT

As we know any licensee shall comply with all relevant laws, standards and technical
specifications relating to petroleum facility with respect to occupational health, public safety and
environmental protection.
3.1. Socio-Economic Environment

The project owner will invest his resource on gas station business on land acquired on lease
base. Therefore he doesn’t disturb the livelihood of any person.
3.2. Environmental Impact Assessment

Currently the issue of environment and development has got a due emphasis and thus firms
should do their business in a manner that they will not affect the natural environment
adversely. Therefore as the nature of the project is a retailing type and the analysis of the
expected negative impacts are elaborated as follows:-

The petroleum storage tanks and filling stations will be regulated to con- form with minimum
standards that meet basic safety, health, operational and environmental protection. Also the
project storage tanks at retail dispensing sites will be placed underground. This prevent the
storage thank from any physical damage. Moreover, the storage tank and pipe work will be
hydrostatically tested. So the probability of petroleum products spill will be zero. Hence the
petroleum products will not cause any damage on the environment.
The project owner will have a periodic environmental audits plan to be performed regularly on
existing tanks. This action will minimize the risk of environment pollution. Similarly the
Employees and public health protection measures will be as sured by implementing
insurance coverage for the staff and third party.

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4. ORGANIZATIONAL STRUCTURE
The general manager is the ultimate decision maker. He has a power to set various rule,
regulation and directives that should be implemented by Petroleum product Managers, oil &
lubricant and car wash manager, Café manager and Supermarket manager and all employees.
He can direct the managers shown on chart. Sanitarian, accountant, auditor and securities
personnel are assistance of General Manager. The second hierarchy in organization chart
incorporates petroleum products manager, oil & lubricants and car wash manager, Café
manager and Supermarket manager. Each manager is responsible in their respective fields.
For instance the Petroleum Products Manager will be responsible for all Petroleum products
sales activities of the Gas Station. Also oil & lubricant manager will be responsible for all sales
related with oil, lubricant and car wash service
4.1. Organizational Charts

The organizational chart of designed is based on the number of fuel pumps and stores the business
sectors and marketing activities, it considered the initial capital, the width of geographical location.
Accordingly Business organizational structure will have three level of management and narrow
span of control.

Based on the above structure, the required staffs and their roles and responsibilities will be defined in the
admin and finance manual to be developed in due process. The required staffs under full business
operation are worked out in table 2 below.

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Table 2: Manpower Required at Full Capacity

No Items Quantity Salary/Month Annual Salary
1 G/Manager 1 5,000 60,000
2 Petroleum product Managers 1 4,500 54,000
3 oil & lubricant and car wash 1 3,500 42,000
manager
4 Gas oil salesman 2 5,000 60,000
5 Super market salesman 1 3,000 36,000
6 Car washer 4 10,000 120,000
7 Cafe manager 1 3,000 36,000
8 Cafe waiters 3 7,500 90,000
9 Accountant 1 3,500 42,000
10 Sanitary 2 3,000 36,000
11 Cashier 1 2,500 30,000
12 Marketer 1 4,000 48,000
13 Diesel salesman 2 5,000 60,000
14 Guards and security 4 8,000 96,000
Total 25 67,500 810,000
Benefit (5%) 40,500
Grand total 850,500

5. FINANCIAL ASPECT OF THE PROPOSAL

5.1, Cost Structure
The Mieso Gas Station will be construed by the domestic contractor using professional skilled
men. All necessary construction input specified in the bill of quantities will be purchased from
domestic and foreign market. The construction activities will be supervised by consultant firm
that have all necessary professional skilled men from all construction discipline. The total Cost
allocated for the project is 37,361,750 birr. Out of this money the cost of construction of the
Mieso Gas Station and building stores will be 20,000,000 birr. Also the cost allocated for
construction consultancy service is 500,000 birr.
When the Constriction process finalized, the cost allocated for furnishing Cafeterias, Super
Markets and offices is 5,000,000 birr. Also salaries of employees for one month and the seed
money or the cost allocated to purchase marketable Items of each firm will be 5,000,000 birr.
5.2. Source of Finance
The source of finance for the construction of Mieso Gas Station and store building and
furnishing all firms inside it will be 30% from the project owners and 70% will be covered with
bank loan.
5.3. Initial Capital
To determine the estimated initial capital required to establish Mieso Gas Station and store
building and to estimate the annual return from investment the following procedure has set up in
advance.

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SN Description Cost in birr

1 Land, Gas Station & Building Construction 20,000,000
2 Machinery and Equipment 5,000,000
3 Office Equipment 1,200,000
Total Fixed investment Cost 5,000,000
4 Pre service Expense 35,000
5 Initial Working Capital 5,000,000
6 Annual Salary Cost 850,000
Total 36,535,000
Contingency (5%) 1,868,087.5
Total Initial Investment 37,361,750.5
Accordingly the project owner has allocated 20,000,000 for construction and machinaries,
5,000,000 for store and office furniture, equipments and tools. Also 1,868,087.5 birr has
allocated for contingency plan.

5.4. Utility Expenses

This includes electric, water, postal and telecommunications services charges and other specific utilities
too, these are also estimated to cost about birr 500/month-7,000 birr/year

5.5. Depreciation cost

A depreciation expense of the building is expected to be 15,000 annually.

5.6. Administrative (Building management expenses)

The administrative expenses includes operating cost such as promotion of the building, salary of renting
and controlling staffs, Guards, cleaners with all utilities. These are also estimated to cost about birr
750/month=9,000 birr per years.

5.7. Other Miscellaneous Expenses

This may includes expenses such as license payment and other an anticipated that are estimated to be
about 400/year.

6. MARKET ANALYSIS SUMMARY.

6.1. Strategy and Implementation Summary

Nahili PLC 's Gas Station will focus on becoming a routine stop for the commuter traffic on Highway
from Addis to east and south, not just for those people who need gas, but for those who are looking for a
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healthy, tasty snack on their drive, or need to pick up some small grocery item on their way home.
Nahili PLC 's Gas Station will aim to be more than a gas station to its customers, it will be a friendly
place to stop for tired commuters.

5.1 Land Use Plan of Project

The competitive edge for Nahili PLC 's Gas Station is the following:
Location and use plan: Nahili PLC 's Gas Station is located on Highway from Addis to east and south. It
is located in east East Hararge zone of oromia region, and its latitude and longitude of 08 degree 54 N ,39
degree 55 east with elevation of 947 meter above sea level. Nahili PLC fuel station will be fully
operational within two years period. As per the business plan and supported by engineering design, the
building requires a total of 5,175 M2 of land of land to be used for the intended purpose. In these terms,
the total area for the construction of intended mixed – purpose building will be used in accordance with
the following plan.

Table 12:- Land Use Plan

S/N Purpose Area Required(M2)
1 Main Building (Construction) 20*25m 750
2 Guard house 6*5m*2 60
3 Store for different equipment 20*15m outside the building 300
4 Parking and waiting area 20*15 300
5 Garden and green area 20*15 300
6 Water reservoir (ROTO) area 10*10 *5 500
7 Generator 5*6m *3 90
9 Spaces for fencing the garden is estimated to be roads 200
10 cafeteria 20*15 300
11 depots 15*15*5 1125
12 Car wash 30*25 750
13 Waste treatment 25x20 500
Total Land Requirement 5,175

6. SALES STRATEGY
Nahili PLC 's Gas Station will keep its gas prices competitive with other stations in a fifty mile radius of
the station in order to attract commuters. Customers that purchase more than Bir100 worth of gas will be
given 15% coupon on purchases in the store during the first month of operation, to encourage purchases
and to introduce them to the concept of buying quality organic foods at the gas station.
6.1. Petroleum Product Annual Sale

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The gas station is expected to provide petroleum product for a minimum of 300,000 vehicles on
average in the initial year. Also it will provide kerosene for 100,000 households.
Table 2: Expected Annual Sale of Petroleum Production
Unit Sales Estimation
Petroleum Products Unit Qty Cost Total Cost
Unit Sale Total Sale
Gasoline(Benzene) litr 1,200,000 61.29 73,548,000 65 78,000,000
White diesel (Naphta) litr 1,200,000 67.30 80,760,000 70 84,000,000
Kerosene litr 1,200,000 67.30 80,760,000 70 84,000,000
Light black diesel litr 600,000 49.67 29,802,000 60 36,000,000
Hard black diesel litr 600,000 48.70 29,220,000 55 33,000,000
Sum 294,090,000 315,000,000

As can be seen from table above the gas station will have five petroleum storage tankers, each tanker
has a capacity of 100,000liters. The Nile oil company expected to supply Gasoline White
diesel (Naphta) and kerosene once in every month and twelve times in each year. Also it
supplies Light black diesel and Heavy black diesel every two months or six times in each
years.
Accordingly, the company is expected to supply 1,200,000 liters Gasoline, kerosene and
Diesel and also 600,000 liters of light black diesel and hard black diesels for Mieso City Gas
Station. Hence the Gas station will provide this petroleum for its legal customers.
In fact, amount of petroleum that will be supplied to this gas station depends on the Ethiopian oil and
energy Authority programme at the same time the price and cost of petroleum product will be
determined by global oil market and Ethiopian oil and energy authority which have the power to set
oil prices.
Based on projected purchase plan as indicated on table above, the total purchase and Sales of petroleum
products in the initial year will be 294,090,000 a n d 315,000,000 birr respectively. Indicating that,
projected gross income will be 20,910,000 birr.

6.2. Oil and Lubricants Store Capacity

The Gas Station will also provide high quality oil and lubricants for its customers, which
includes Diesel Engine Oils, Petrol Engine Oils, Gear Oils, Engine Oils, Brake Fluid,
Hydraulic Oils and Industrial Gear Oils. All oil and lubricants will fulfill the quality and
standards of set by Ethiopian oil and energy authority. The annual provision of some of the
main oil and lubricants are as follow.
Table 3: oil and lubricants
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SN Category Model Unit Budget Allocated

 Delo 400LE 15W40 Birr 1,000,000
1 Engine Oils  Delo 400 15W40
 Delo Gold 15W40
 Delo Silve(Monograde)
2 Transmission  STOU 15W40 Birr 600,000
Oils  Textran TDK Premiuml
3 Gear Oil  Thubal GL5 EP 80W90 Birr 600,000
 Thubal GL5 85W140
4 Hydraulic Oils  Rando HDZ 46 Birr 500,000
 Rando HDZ 68
 Starplex EP Greases Birr 300,000
5 Greases  Molytex EP Greases
 Multifak EP Greases

All the above oil and lubricates imported by petroleum company of Ethiopia. These oil and lubricants
have high quality and accepted universally. Hence Mieso Gas station will purchase these oil and
lubricants from available Ethiopian Company and for interested customers.
Regarding engine oil, the gas station planned to provide four types of oils such as Delo 400LE 15W40
engine oil. This oil is industry leading super premium quality engine oil which exceeds industry
and engine manufacturers’ performance requirements. The second one is Delo 400 15W40. This
engine oil is premium performance, multi-grade, heavy duty diesel engine oil. The third engine
oil is Delo Gold 15W40. This oil is high performance multi-grade, heavy duty diesel engine oil and
the forth engine oil is Delo Silve (Monograde). This oil is high quality mono-grade, heavy
duty diesel engine oil. For the initial year when the gas station commence its operation, the
project owner, allocated 1,000,000 birr for engine oil.

Also the gas station will provide two types of transmission oils. The first transmission oil is STOU
15W40 (Super Tractor Oil Universal) & the second one is Text ran TDH Premium or UTTO
(Universal Tractor Transmission Oil. It is transmission hydraulic systems-wet brake. For the initial
year the project owner, allocated 600,000 birr for transmission oil. Moreover, the gas station will
provide types of gear oils, such as Thubal GL5 EP 80W90 and the other one is Thubal GL5
85W140. For the initial year the project owner, allocated 600,000 birr for gear oil.

In addition the gas station will provide two types of hydraulic oil, These are Rando HDZ 46 &
Rando HDZ 68. Both hydraulic Oils are very high viscosity index hydraulic oil for hydraulic
systems operating at low or widely varying temperatures. For the initial year the project owner,
allocated 500,000 birr for hydraulic oil.

Furthermore, the gas station wills sales three types of greases Starplex EP Greases, Molytex EP

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Greases and Multifak EP Greases. The first grease, Starplex EP Grease is multi-purpose extreme
pressure high temperature Lithium complex grease. The second grease, Molytex EP Grease is
multi-purpose extreme pressure Lithium/ Calcium grease with MoS2. The third grease is
Multifak EP Grease. This grease is Multi-purpose Lithium grease containing highly refined base
oils and EP additives. For the initial year the project owner, allocated 300,000 birr for grease.
Apart from the above mentioned oil and lubricants

6.3. Car Wash Service Revenue

Apart from petroleum products, oil and lubricants sales, the gas station will engage in car wash
services as shown in table
Table 4: car wash services
Qty per Daily Monthly Yearly
SN Description unit Unit Price
day income income income
1 Trucks Pcs 5 1,500 7,500 225,000 2,700,000
2 Pick up Pcs 5 500 2,500 75,000 900,000
3 Mini Bus Pcs 5 1,000 5,000 150,000 1,800,000
4 Automobile Pcs 10 350 3,500 105,000 1,260,000
5 Three Wheels Pcs 20 250 5,000 150,000 1,800,000
Sum 45 23,500 705,000 8,460,000

4.4 Cafe Services Revenue

Qtty UP Income
Descriptions unit
daily monthly Annually
Tea cup 100 10.00 1,000.00 30,000.00 360,000.00
Coffee cup 350 25.00 8,750.00 262,500.00 3,150,000.00
Cakes pcs 100 75.00 7,500.00 225,000.00 2,700,000.00
Ice Cream Can 50 75.00 3,750.00 112,500.00 1,350,000.00
Juice Bottle 120 70.00 8,400.00 252,000.00 3,024,000.00
Breakfast meal 200 100.00 20,000.00 600,000.00 7,200,000.00
Sum 920 49,400.00 1,482,000.00 17,784,000.00

4.5. Summary of Gross Income

Petroleum Sale
Unit Unit
Petroleum Products Unit Qty Cost Total Cost Price Total Price
Gasoline liter 1,200,000 47.83 57,396,000 55.50 66,600,000
White diesel (Naphta) liter 1,200,000 49.02 58,824,000 58.05 66,600,000
Kerosene liter 1,200,000 49.02 58,824,000 58.05 69,660,000
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Light black diesel liter 600,000 53.10 31,860,000 59.15 35,490,000

Heavy black diesel liter 600,000 52.37 31,422,000 60.23 36,138,000
Sum 238,326,000 274,488,000

Car Wash services

Qty per Daily Monthly Yearly
SN Description unit Unit Price
day income income income
1 Trucks Pcs 5 1,500 7,500 225,000 2,700,000
2 Pick up Pcs 5 500 2,500 75,000 900,000
3 Mini Bus Pcs 5 1,000 5,000 150,000 1,800,000
4 Automobile Pcs 10 350 3,500 105,000 1,260,000
5 Three Wheels Pcs 20 250 5,000 150,000 1,800,000
Sum 45 23,500 705,000 8,460,000

Cafe Services Revenue

No. Unit Income
Descriptions unit
person Price daily monthly Annually
Tea cup 100 10.00 1,000.00 30,000.00 360,000.00
Coffee cup 350 25.00 8,750.00 262,500.00 3,150,000.00
Cakes pcs 100 75.00 7,500.00 225,000.00 2,700,000.00
Ice Cream Can 50 75.00 3,750.00 112,500.00 1,350,000.00
Juice Bottle 120 70.00 8,400.00 252,000.00 3,024,000.00
Breakfast meal 200 100.00 20,000.00 600,000.00 7,200,000.00
Sum 920 49,400.00 1,482,000.00 17,784,000.00

4.6. Projected Profit and Loss

The following table and Tables highlight the projected profit and loss.
S/N Description Years
Yr1 Yr2 Yr3 Yr4 Yr5
A Expenses(Birr ‘000’)
Payroll 850 1000 1200 1300 1350
Building Expenses 20,000 0 0
Depreciation 15 15 15 15 15
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Utilities 7 7 7 7 7
Machinery and Equipment 1,200 1 0 0 0
Office Equipment 5,000 0 0 0 0
Total Fixed investment Cost 35 0 0 0 0
Pre service Expense 5,000
Purchase of fuel 294,090 295,000 300,000 325,000 330,000
Total Expense 326,197 297,022 301,222 326,322 331,372
Contingency (5%) 16,309 16,309 16,309 16,309 16,309
GRAND TOTAL EXPENSES 342,506 313,331 317,531 342,631 347,681
B Revenue
Sales of Petroleum 312,732
Sale from car wash 8,460
Sales from café 17,784
Sales from super market 12,000
Total Revenue 350,976 386,073.6 421171.2 456,268.8 491,366.4
A-B 24,779 72,742.6 103,640.2 113,637.8 143,685.4
Annual Net Profit 8,490 56,433.6 87331.2 97,328.8 127,376.4

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Appendix

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