Sintayehu Nesibu Balerke

Business plan for fuel Station

Submitted to CBE

2023/2024
Table of Contents
Executive Summary ............................................................................................................................ 2
Background and description of business ............................................................................................. 3
Organizational structure and manpower requirement of the company ................................................ 7
Marketing Plan .................................................................................................................................. 8
Product and service.......................................................................................................................... 11
Financial Plan................................................................................................................................... 13

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Sintayehu Nesibu Balerke
 1. Executive Summary
This business plan is developed for the purpose of analyzing and extracting the highly growing
potential and resulting multi faced benefit of Sintayehu Nesibu Balerke retailing trade of vehicle
fuel and lubricant in Gas station, subletting/renting of fixed property 2023/24. We are curtained
that it will assist our management team in setting the long term direction and policies of our
company. Moreover, it will help guidance for multiyear program plans and budgets.

Sintayehu Nesibu Balerke is the visionary women and have long year experience in business
sector, in accordance with the pertinent commercial law of Ethiopian with a paid up capital of
birr 100,000.00 by the founder, namely Sintayehu Nesibu Balerke. Its fuel station is found in
Addis Ababa, Nifas Silk Lafto sub city , near kera Gofa Condominium, Gofa NOC

Since, its establishment the company has registered enviable track record enabling it’s to prove
its capacity and competence to penetrate the market easily and in a short period of time to
become profitable. Comparing to its age, the achievement reveals its rush to be the leading
company especially in the retail trade of vehicles fuel (within the filling station) and lubricants in
a short period of time. In addition to the provision of fuel & lubricant, other specialized products
like modern car wash, Lub change, supermarket, café and restaurant is planned to implement by
outsourcing to other.

Sintayehu Nesibu Balerke is organized and run by more than 15 professional and non-
professional permanent staff and management organ , which are applying their full exertion to
the best growth of the company. Sintayehu Nesibu Balerke has an elastic plan to achieve its
participation and making a difference especially in retail business of fuel station.

In the same way, this document is developed to show our business potential of the company as
well as providing any relevant and pertinent information to the concerned stakeholder initially. It
ties to describe the prime cornerstones of our company and then it exhaustively examines the
crucial consideration which must be addressed for the success of our company as a whole.

This business will generate 1.9 billion amounts of sales from fuel station and profit of 9.3
million, and will pay bill 5 million for tax. The business would like to request loan to be obtained
from Commercial Bank of Ethiopia as a form Overdraft birr 50,000,000.00 for the purpose solve
its working capital shortage.

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 2. Background and description of business
The Business plan realistically asses the Business potential and takes into account of both the
positive and negative issue that will impact on the business.

We prepared without assistance from a professional, the strategies and forecasts that are
contained in the plan are those of the promoters. The primary purpose of the business plan is to
identity the strengths and weakness of the business and give a realistic assessment of the most
probable performance of the business over the period for the plan is drawn up.

Ethiopia imports its oil and refined petroleum products from international supplies through the
Ethiopian petroleum supply enterprise (EPSE), which is an enterprise formed by the merger of
former two state owned organization, the National Depot Administration (NDA) and the
Ethiopian Petroleum enterprise (EPE). EPSE is a sole petroleum products supplier in the country
that purchases products in bulk, manage oil reserves and wholesales to distributors. Ethiopia
purchases petroleum products from two sources, bilateral agreement with foreign government
and international auctions for private own companies. Currently Ethiopia buys petroleum
products from Kuwait petroleum

Ethiopia industry, transport and commercial sector largely depend on imported fuel. The amount
of foreign currency spent for the importation of petroleum products is very significance and it is
between 23 to 28 percent of the export earnings. Very limited and very few proportion of the
population in Ethiopia have access to modern fuel. Road sector diesel consumption per capita is
about 14.36 as per World Bank report, which is one of the lowest in the world.

Sintayehu Nesibu Balerke is a Sole proprietorship established in the year 1999 E.C with the
objective of retail trade of vehicles fuel (within the filling station) and Lubricant). The company is
managed by beneficial owner or CEO, Sintayehu Nesibu Balerke and her spouse Ato Assefa Argaw,
together with other supportive qualified and experienced management team. The owner/manager of
the business has acquired adequate experience in the business and remarkable performance
registered is the witness for the caliber of the founder

Sintayehu Nesibu Balerke is a registered and licensed petrol filling station. The station is located in
Addis Ababa saris Gofa NOC station which be situated along major roads of Addis Ababa
strategic location of the town special vehicle and currently it is the center of the town where major

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business is taken places and also residential area for major rich merchant of Merkato area . The gas
station will be seeking to expand its network so it can offer its services in major cities all around
Ethiopia.

The gas station has been entrusted to retail its products services and also retail petroleum by
products used in motor engines like petrol (PMS), diesel, and engine oil, it has also retail denser
petroleum products like kerosene (AGO). The gas station has also provide more services for cars
which include car wash services, vulcanizing services, wheel balancing, and alignment services,
and also other automobile-related services.

our customers are the key to success in business, this has ensured by making our services
impeccable and customer-centric, then we have ensured quality in our products and services, we
have opened to adapting use the latest technology so it becomes easy to use and welcoming for
consumers, our customer service and other complementary services will position us to become
the most preferred petrol station wherever in Ethiopia we are set up.

Company Profile

Name of Entity Sintayehu Nesibu Balerke

Office Address Gefa NOC station
Contact Person Sintayehu Nesibu Balerke
Designation CEO/Owner
Types of Economic Activity Retail trade of vehicles fuel (within the fillin
station) and Lubricants
Fixed property subletting/renting activities
Legal form of business Sole
Status of the business Operational
Registration Agency Addis Ababa city Administration Trade Bureau
Licensing Agency Addis Ababa city Administration Trade Bureau
Licensing No. & Date 14/666/5345/2004
Tax Paying Identification Number(TIN) 0003329237

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Mission, Vision and Objective of the Company

Vision

“To be the leading retail petroleum products distribution and related services marketing company in
the Ethiopia by the year 2020.”

Mission

➢ To provide all customers with reliable, professional and innovative solutions through
friendly, excellent and convenient services
➢ Bring customer delight and become a trustworthy partner to customer by excelling in
every aspect of operations

Objectives

The immediate objective of the business is to participate in the purchase and distribution of
petroleum and petroleum products in the country and alleviate the problem associate with
repeated petroleum shortage thereby generating financial profits. To this effect, the owner has
established his fuel station in Addis Ababa , Gofa NOC station with agreement of NOC to
supply his petroleum.

To achieve our Vision and Mission, we will train and develop competencies across the
organization to enable us to demonstrate that we excel at what we do in the region

In the long term, the owner has the objective to expand its fuel station in various locations in
Addis Ababa.

Company Values and Culture

The following are components of the company’s values and cultures.

➢ The company respects the values and contributions of every employee as essential for its
success.
➢ The company communicates openly and honestly.
➢ Unethical and dishonest practices have no place in the company
➢ The company recognizes and rewards performance
➢ The company believes that staff development is integral part of its success

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 ➢ The company strongly believes that teams, not individuals are the essential unit of the
organization for achieving high performance and accelerating growth.
➢ The company believes in societal support and community development; hence, all its
personnel will obey to this core value.
Keys to success

➢ Trading and management experience:

➢ Financial strength.
➢ Product quality and customer satisfaction
➢ Improved manpower and fair labor cost:
Beneficiaries of the Company

The social economic significance of the company can be explained in terms of the financial
contribution it makes to the economy of the country, the job it creates to the citizens and the
economic and social benefits enjoyed by citizens as the company solves the problem of fuel
shortage. Besides, the existence of the business and hence, the fact that people that het employed in
the company will have the capacity to send their children to school and will have the capacity to
consume from suppliers of goods and service in their surrounding thereby creating a positive
multiplier chain effect.

In terms of employment opportunity creation, the company has more than 15 employees both
clerical and non-clerical and pays out birr almost 2 million in wages and salary per year. The
company has paid birr 4.2 million to the government in the form of tax.

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 3. Organizational structure and manpower requirement of the company
3.1. Profile of Management
The company believes in doing business by professionals and has permanent staff and more than
10 seasonal workers. Basically, Sintayehu Nesibu Balerke has well experienced and professional
management staffs who are managing the company. The following tables depicted the
management staff and their experience

List of management staff and their experience

Sr. No Name Position Educational Qualification Year of

experience
1 Sintayehu Nesibu Owner Self-educated 46+
2 Ato Henock Assefa General Manager BSc 12+
3 Ato Addisu Assefa Deputy Manager MSc 5+
4 Ato Tewodros Tsrioku Gas Station Manager BAc 15+
5 Ato Melese Lenigeso Finance Manager BSc 19+
6 W/ro Teshaynesh Adane Accountant BSC 14+
Organizational Structure

Chief Exc.
Officer (CEO)

Deputy Gas Station Gas Station

Finance HR Manager
Manager Manager Supervisor

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 4. Marketing Plan
Ethiopia imports all its petroleum consumption from abroad in a refined form through the state
owned enterprise, Ethiopian petroleum supply enterprise (EPSE). The petroleum sector is
characterized by four players, each allocate a distinct role to play in the operation. The EPSE is
the sole importer and wholesaler of petroleum product in the country. The enterprise imports and
wholesales the product to distributor from Djibouti upon calculating its own profit margin
against international market. The second player, the Federal Ministry of Trade sets periodic the
domestic price of petroleum products routinely for a specific period, usually one month. By
doing so, the Ministry determines the profit margin per liter of each product for all of the three
players, EPSE, Distributors, and retailers. The Ministry also set the transport rate of fuel.

Distributor

Distributor are responsible for purchasing in bulk from EPSE and sell in bulk to the retailer
which are affiliated to them with predetermined buying and selling prices and margin per product
per liter. Distributor are also required to old minimum reserves of 500 cubic meter of refined
products at their depots to avoid fuel shortage during imports, uploading and transportation of
products to retailer. Distributor are also the major players in the sector to promote their company
brands to attract customers to their brand, services and oil and lubricants they distribute under
their name and logo.

Fuel Market

There are some licensed petroleum distribution and marketing companies, in the country, out of
which five (Total, Oil Libiya, Kobil, Nile Petroeum, and Wadi Al Sundus) are foreign based and
the other (National oil Co of Ethiopia, Yetebaberut Petroleum, TAF oil, and various recent
entrant) are locally established companies after the enactment of a law that enabled local
companies to participate in the petroleum business since 2004. However, out of all companies,
they are currently operating in Ethiopia, 904 percent of petroleum distribution is done by four
companies, NOC(National Oil Companies), Oil Libia, Total and YBP.

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Two third of petroleum imports are used for transport sector consumption, while the remaining
portion is used for industries and urban area cooking purposes.

Fuels are generally homogeneous products from the same source, transported the same way and
are generally sold in similar manner. The market for fuel is therefore very competitive since
product differentiation is closely tied to the marketer’s corporate reputation.

Therefore, Sintayehu Nesibu Balerke identifies itself as retail trade receiving petroleum from
NOC.

Retailers

The retailer business of petroleum product in Ethiopia is run by fuel station owners and operators
are required to be distinct from fuel distribution and marketing companies. On the other hand
distribution companies are required to establish at least to fuel stations before they commence
operation and the number of fuel station under their trade mark has o each at least six in five
years. If distributors construct themselves, they would need to transfer the retail operation to
another person through rent

Demand for Petroleum

Petroleum is one of the most traded items in the world. Petroleum is a necessity product and the
nature of its demand is inelastic. Unlike other business whose demand is impacted by price and
other economic variables, the face of any economic slowdowns. Demand for petroleum products
such as Fuels and Lubricant in Ethiopia is massively growing at an average rate of 10% over the
last five years.

Supply of Petroleum

Ethiopia petroleum supply enterprise (EPSE) is the sol supplier of petroleum products for the
nation, the enterprise bulk purchase refined dispel, jet fuel, kerosen, Gasoline (Benzene), light
fuel oil from international suppliers and sell to the distributor in bulk. The distributor, then,
dispatch to their affiliate retailer (Fuel Station) when it comes to other petroleum products than
fuel oils. Fuel oils are bulk sold to commercial and industrial consumers without the involvement
of fuel station. On the other hand the other petroleum by products such as LPG, Bitumen,
Lubricant oil and grease are imported directly by distributing companies and sold to the

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consumers/user through the retail station and other retail outlet shops. Distributors have the
prerogative to determine the profit margin and selling prices on products they import on their
own (without MOT involvement)

There is repeated outcry about the shortage of petroleum products supply in the country due to
the weakness of distributors and transporters. Some distributors have limited financial capacity
to address the market demand whereas the transportation suffers from old and inefficient fleet
vehicle. Petroleum shortage are also observed during month-ends because of the desire of the
retailer to speculate price increase on stock on their hands on hand and on another to escape loss
on lower price change effects in case the consumer price are revised up by the Ministry of
Trade(MOT)

Due to the above mentioned bottlenecks on the transportation and distribution, the supply of
petroleum is usually less than the demand for the product. This fact is depicted on the petroleum
import data of the country for the last nine years in which the supply for some petroleum
products has been, though irregular, increasing at a lower rate than the increase in quantity
demanded. The data obtained from EPSE shows the average growth rate for all petroleum
products during the nine years period as 8%

Furthermore, number of vehicle in the country is increasing with significantly in big cities
mainly due to the relative increase in number of middle class society and the need for private
commuting following the economic growth in the country. The cause for increasing number of
private vehicle in the county may also be interpreted as low development of mass transportation
means commensurate with population growth and demand for the transportation services.
Increase in the number of vehicle for transport of people and good, will apparently increase the
demand for petroleum in the future insight.

SWOT Analysis

During its business engagement, Sintayehu Nesibu Balerke has its own strength, Weakness,
opportunity and Threats (SWOT) in the business transaction. Due to that there is an internal and
external strength and weakness face in each business year.

Strength

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 ➢ Has reach and experienced staff in each field
➢ Ample fixed assets
➢ The company employed high caliber, diligent, motivated, experienced and customer
oriented staff and professionals
➢ Easily trained labor
➢ Considerable resource base
➢ established strong market
➢ up to date leather technology installed
➢ Good reputation of customer handling
➢ Good supply chain with NOC

Weakness

➢ Shortage of finance
➢ Underutilized capacity
➢ Shortage of resource

Opportunities

➢ There is a high demand of the products

➢ The company has known consistent customers
➢ Ability to grow because of increase in market demand
➢ Currently fuel is the only source of energy for vehicles, industries and etc
➢ priority sector well recognized by government

Threat

➢ shortage of products in the country due to foreign currency requirement

➢ low profit margin for the sector
5. Product and service
Sintayehu Nesibu Balerke fuel station is located in Addis Ababa in Nefas Silk Lafto subcuty
around Kera-Gofa Condominium . The owner has planned to expand number of fuel station in
the long run. The fuel station has four tanks, one for Benzene and the other two are for Gasoline
(Nafeta) and one for Kerosene with holding capacity of 50,000.00 liter per tank.

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The business on average receives Benzene one vehicle with capacity of 48,000 lite within three
days and Gasoline (Nafta) two vehicles in every two days.

Fuel receiving Capacity and receiving price

The current capacity of the fuel station is as follow
➢ Regular receiving (1 Tank) – has 50,000 liter receiving capacity but actual 48,000
liter receives within every 3 days with price of birr 73.97 but it will vary as per the
government regulation
➢ Gasoli receiving (2 Tank) – has 100,000 liter receiving capacity but actual 48,000
liter/Vehicle receives within every 2 days with price of birr 75.46 but it will vary as
per the government regulation
➢ Kerosene Receiving (1 Tank)- has 50,000 litere receiving capacity but actual 48,000
liter/vehicle receives once in week with price of birr 75.46 but it will vary as per the
government regulation
➢ We have planned to double our sales from oil and lubricant from the previous year
sales performance from oil and lubricant and assume cost of Goods Sold to be 80%.
Since the demand of the product is increasing we can achieve our plan.

1. Forecasted cost of Sales for (2023/24)

Cost of Number of days

Cost per liter liter to be recive Total Cost
Sales Fuel Recived
Regular 73.97 48,000.00 121 429,617,760.00
Gasoline 75.46 96,000.00 183 1,325,681,280.00
Kerosen 75.46 48,000.00 48 173,859,840.00
Total 1,929,158,880.00
Purchase Plan for first year plan period
Sr.No Types of product Previous Year Performance
Purchase Plan for 2024
1 Cost of oil & Lubricant 9,114,652.31 18,229,304.62
Total 18,229,304.62
Grand Total 1,947,388,184.62

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 2. Forecasted Sales for (2023/24)

Sale Sales price per liter liter to be sold Total Sales

Regular 74.85 5,808,000.00 434,728,800.00
Gasoline 76.34 17,568,000.00 1,341,141,120.00
Kerosen 76.34 2,304,000.00 175,887,360.00
Total 1,951,757,280.00
Sales Plan for first year plan period
Previous Purchase
Sr.No Types of product
Year Performance Plan for 2024
Sales of oil &
1 11,393,315.39 22,786,630.78
Lubricant
Total 22,786,630.78
Grand Total 1,974,543,910.78

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 6. Financial Plan
The following assumptions are developed considering the historical performance of the business
and other market parameters

 The plan life is assumed to be 5 years

 The Sales of the business is expected to increase by 20% on wards the second year and,
the cost of Sales and the selling price is assumed to increase similarly by 20% and
 Interest rate is assumed to be 14 % per annum
 Income tax is assumed to be 35%

1. Projected Income Statement

Sintayehu Nesibu Balerke

Projected income Statement
Year
Item 1st 2nd 3rd 4th 5th
Revenue 1,974,543,910.78 2,369,452,692.94 2,843,343,231.52 3,412,011,877.83 4,094,414,253.39

Cost of sales 1,947,388,184.62 2,336,865,821.55 2,804,238,985.86 3,365,086,783.03 4,038,104,139.64

Gross Profit 27,155,726.16 32,586,871.39 39,104,245.66 46,925,094.80 56,310,113.76

Administrative
5,786,244.24 6,943,493.09 8,332,191.71 9,998,630.05 11,998,356.06
cost

Profit before
interest and 21,369,481.92 25,643,378.30 30,772,053.95 36,926,464.75 44,311,757.70
tax

Interest 7,000,000.00 7,000,000.00 7,000,000.00 7,000,000.00 7,000,000.00

Profit before
14,369,481.92 18,643,378.30 23,772,053.95 29,926,464.75 37,311,757.70
tax
Tax 5,029,318.67 6,525,182.40 8,320,218.88 10,474,262.66 13,059,115.19

Profit after tax 9,340,163.25 12,118,195.89 15,451,835.07 19,452,202.09 24,252,642.50

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 2. Projected Cash Flow Statement

Sintayehu Nesibu Balerke

Projected Cash Flow Statement

Items per
1st 2nd 3rd 4th 5th
year

cash inflow

Beginning
59,340,163 71,458,359 86,910,194 106,362,396
Balance

loan granted 50,000,000.00

Sales 1,974,543,911 2,369,452,693 2,843,343,232 3,412,011,878 4,094,414,253

Total Inflow 2,024,543,910.78 2,428,792,856.18 2,914,801,590.66 3,498,922,072.04 4,200,776,649.69

Cash outflow

C.G.S 1,947,388,185 2,336,865,822 2,804,238,986 3,365,086,783 4,038,104,140

Administrative
5,786,244.24 6,943,493.09 8,332,191.71 9,998,630.05 11,998,356.06
cost
Interest 7,000,000.00 7,000,000.00 7,000,000.00 7,000,000.00 7,000,000.00
Tax 5,029,319 6,525,182 8,320,219 10,474,263 13,059,115

Total outflow 1,965,203,748 2,357,334,497 2,827,891,396 3,392,559,676 4,070,161,611

Net cash flow 59,340,163 71,458,359 86,910,194 106,362,396 130,615,039

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