Ethiopia, Djibouti and Dangote plan fuel pipeline as cost and storage details remain unclear

Ethiopia, Djibouti and Dangote Group have announced a plan for a 120-kilometre pipeline to move refined fuel from Djibouti into landlocked Ethiopia. The project could change how fuel reaches Ethiopia’s main market, but its financing and storage capacity have yet to be clearly established.

Prime Minister Abiy Ahmed announced the project on 24 September alongside Djibouti President Ismail Omar Guelleh and Dangote Group president Aliko Dangote, Reuters reported. The planned line would run from Damerjog in Djibouti to Dewele in Ethiopia, a route also described by Ethiopian news organisations.

What has been announced

Reuters identified Ethiopian Investment Holdings and Dangote Group as the development partners. It reported that storage terminals are planned at both ends of the route. The announcement concerns a pipeline for refined petroleum products, rather than a line carrying crude oil to a refinery.

BBC News reported that the first phase is intended to carry jet fuel, diesel and petrol. Those products serve different users, from aviation to road transport. The reporting establishes the proposed purpose of the line; it does not establish how much fuel it will carry once operating.

The Ethiopian Broadcasting Corporation said the African Export-Import Bank was supporting financing. Its account did not establish the bank’s contribution or terms. Reuters identified the project partners without naming a lender, leaving the respective financial commitments of the participants unclear.

Why the corridor matters

Ethiopia relies heavily on Djibouti’s port for imports, including petroleum products, according to the BBC. A World Bank corridor assessment said Djibouti’s port handled about 95% of Ethiopia’s imports and exports at the time it was prepared. That older figure describes the corridor’s importance, not a current measurement of its share.

Abiy said fuel now takes about five days by truck to reach Addis Ababa and projected that the new system could cut the journey to about one day, according to the Ethiopian News Agency and the Ethiopian Broadcasting Corporation. The one-day figure is a forecast, because the pipeline is not yet operating.

The Ethiopian News Agency reported that Abiy wants the pipeline and its storage sites to work with the port, highway, railway and Mojo Modern Logistics Centre as one transport network. A pipeline would therefore be one part of a broader attempt to move fuel through the corridor more efficiently.

A World Bank assessment described limits on the existing railway’s use at the time it was written: it put occupancy at about 20% and the railway’s share of trade at about 15%. Those historical figures help explain why road transport remained important, but they are not evidence of the railway’s present performance.

Expected benefits and unresolved details

Reuters reported that the developers expect the project to reduce logistics costs and delays and improve the resilience of fuel supplies in Ethiopia and Djibouti. These are aims, not measured results. Faster transit alone would not establish how much households or businesses might eventually pay for fuel.

Storage capacity also needs clarification. The BBC described about 400 million litres of storage. The Ethiopian News Agency and Ethiopian Broadcasting Corporation described more than one million cubic metres combined at the two ends of the route. The published accounts do not explain how those figures relate to each other or what each includes.

The BBC said Djibouti could gain port activity, jobs and government revenue. Its account did not provide a verified job total. The number of positions, where they would be based and whether they would last beyond construction are not established in the available reporting.

The immediate development is an announced cross-border project with a named route and partners. Its promised gains depend on construction, financing and the way the proposed terminals and transport links operate together. A firm funding breakdown, reconciled storage specifications and evidence of actual delivery times will be needed to judge the project’s effect.