May 12, 2025

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Fuel industry of Ethiopia is in crisis

Ethiopia Struggles with Fuel Shortages and Debt

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Ethiopia faces a severe fuel crisis. Reports indicate Ethiopia could accumulate 35 billion Birr in fuel debt within two months. This situation arises from delays in fuel price adjustments. Trade and Regional Relations Minister Dr. Kassahun Gofe warns that the consequences could be dire without action.

The Ministry of Trade and Regional Relations and the Ethiopian Petroleum and Energy Authority must work together. Their goal is to ensure legitimate petrol purchases and improve access to gas stations. The current system suffers from fuel supply, transmission, and usage inefficiencies. This wastefulness highlights the urgent need for reform.

The House of Representatives Standing Committee on Trade and Tourism Affairs recently discussed a draft proclamation to improve fuel marketing practices. This draft seeks to establish a legal framework for importers, distributors, and gas stations. Such regulations will help curb inefficiencies and promote fair competition.

One key aspect of the reforms includes integrating digital payment systems at gas stations. This will enhance transparency and reduce corruption in the fuel sector. The Ethiopian Petroleum and Energy Authority has started implementing cashless transactions through platforms like Telebirr.

The potential for accumulating over 30 billion Birr in fuel debt is a severe warning for Ethiopia. Ethiopia can create a more sustainable fuel management system by establishing a strong regulatory framework and digital solutions.

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