Effect of Pricing Policies and Regulation on the Petroleum Supply Chain Effectiveness: The Case of Total Ethiopia S.C.

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Addis Ababa University


The demand for petroleum products in Ethiopia have increased over the past decade in parallel with the country’s growth rate. As the demand for petroleum products increase, the supply chain effectiveness have become an important issue on delivering the required level of performance. This research made its main objective to examine the effect of pricing policies and regulations on the petroleum supply chain effectiveness for the case of Total Ethiopia Share Company. The effects of pricing structure of fuel, marginal gain from fuel sales, and fuel transportation rate (the factors of petroleum pricing policies and regulation) on the petroleum supply chain effectiveness were analyzed. Explanatory research design was used to identify pricing policies and regulation factors and to examine the effect of pricing policies and regulation on the petroleum supply chain effectiveness. Descriptive and inferential statistics (correlation and multiple linear regression) were used to analyze the data gathered. Self-administered questionnaires and structured interviews were used to collect primary data and purposive sampling technique were implemented on selecting participants that have a direct involvement with the supply chain and 51 employees of Total Ethiopia S.C. were participated on the research. IBM SPSS Statistics software (version 26) were used to encode and analyze the primary data gathered through structured questionnaires. The reliability of the data were checked by using Cronbach’s alpha coefficient value and the result of the analysis showed higher internal consistency reliability. According to the result obtained from the correlation analysis, all the factors of petroleum products pricing policies and regulations were positively correlated with the petroleum supply chain effectiveness. The model summery from multiple regression analysis of the surveyed data further showed that the value of R and R Square of the model explains more than half of the variance in the petroleum supply chain effectiveness. The multiple linear regression analysis on the survey data also revealed that marginal gain on fuel make the stronges, unique and statistically significant contribution to the prediction of petroleum supply chain effectiveness.



Petroleum, Supply Chain Effectiveness, Pricing Structure, Marginal Gain, Transportation Rate