Power Pivots: Petroleum Dips and Electric Surges in Q2 2022/23

The energy sector continues to be a significant force in the global economy, and recent data provides insight into current trends and challenges. This article seeks to delve into this complex terrain, examining the import and valuation of petroleum products, changes in their prices, and the progress in electric power generation during the second quarter of 2022/23.

During the second quarter of 2022/23, the energy sector experienced a shift in the import volume of petroleum products, which stood at approximately 924.4 million metric tons. A comparative view of this data against the previous year reveals a 2.1 percent annual decline. Such a downturn can largely be attributed to the decrease in the volume of several key petroleum products - fuel oil saw a decline of 15.1 percent, gas oil decreased by 3.0 percent, and regular gasoline dropped slightly by 0.5 percent. On a quarterly basis, a downward trend was also observed with a 4.6 percent fall from the preceding quarter.

In terms of the composition of these imports, gas oil dominated the field, accounting for 65.6 percent of total quarterly imports. This was followed by regular gasoline (18.3 percent), jet fuel (14.0 percent), and fuel oil, which constituted the smallest segment at 2.1 percent.

When assessing the value of petroleum products imported during the review quarter, there was a substantial surge to Birr 47.9 billion, a 43.4 percent increase from the same period last year. However, it should be noted that there was a decrease of 16.9 percent in comparison to the preceding quarter. Notably, the annual increase was the result of a higher import value across all petroleum products, except for fuel oil which had a marginal share of 1.1 percent.

The average Free On Board (FOB) price of petroleum products also displayed an upward trajectory, surging by 50.8 percent over the same period of the previous year. However, there was an 11.9 percent decrease compared to the previous quarter. The average price of Brent crude oil, a standard benchmark for international oil price, mirrored this upward trend with an 11.3 percent increase, reaching USD 88.6 per barrel from USD 79.6 a year ago. The local implications of these international trends were felt in Addis Ababa, where the average retail price of fuel rose dramatically, reaching Birr 72.74 per liter from Birr 36.99 a year earlier, representing a 96.6 percent annual increase.

Parallel to the developments in the petroleum sector, there have been significant strides in electric power generation. During the second quarter of 2022/23, approximately 4 billion KWH of electric power was generated, marking a 6.3 percent increase relative to the same quarter in the previous year. This growth was driven by a 6.7 percent increase in electric production from hydropower and an 8 percent increase from wind sources. The majority of the total energy produced was attributed to hydropower, contributing 95.6 percent, while the remaining 4.4 percent stemmed from wind sources.

In conclusion, the data from the second quarter of 2022/23 depicts a complex energy landscape, marked by changes in the import and valuation of petroleum products, fluctuations in pricing, and advancements in electric power generation. As we continue to monitor these trends, it becomes evident that understanding these dynamics can play a critical role in making informed decisions in the energy sector.