Ethiopia Adjusts Fuel Prices Amid Global Market Pressure and Domestic Budget Realignments











Addis Ababa, March 23, 2025 — The Ministry of Trade and Regional Integration has revised fuel prices across the country, effective March 21, 2025 (Megabit 12, 2017 E.C.), citing global oil market volatility and the need to stabilize local fuel supply chains. The adjustments reflect Ethiopia’s continued efforts to reconcile international energy costs with domestic economic priorities as fuel remains one of the country’s largest import expenses.

According to the Ministry’s official announcement, the new prices are as follows:

Benzene (Petrol): 112.67 ETB/liter

Diesel: 107.93 ETB/liter

Kerosene: 107.93 ETB/liter

Light Black Diesel Oil: 109.22 ETB/liter

Heavy Black Diesel Oil: 106.75 ETB/liter

Jet Fuel: 109.20 ETB/liter

This revision follows the mandate of Proclamation No. 14/2017, Article 12, which allows the government to set and regulate petroleum product prices in line with international market shifts.

A Balancing Act: Inflation, Subsidies, and Supply Security

The move comes as the government walks a tightrope between inflationary pressures and the rising cost of fuel imports. Global crude oil prices have experienced renewed volatility due to geopolitical tensions, OPEC+ production cuts, and supply chain disruptions, all of which impact Ethiopia’s fuel import bill.

Despite fuel subsidies being gradually reduced in recent years, the government continues to cushion consumers from full exposure to international price shocks. However, as foreign exchange reserves tighten and the birr continues to face depreciation pressures, maintaining stable fuel imports has become increasingly challenging.

The Ministry emphasized that the price changes are designed to ensure sustainable fuel supply, discourage black market activities, and maintain transparency across the distribution chain. It also noted that public institutions and transport operators must strictly adhere to the updated rates to prevent artificial scarcity and price gouging.

Ripple Effects on the Broader Economy

Fuel price changes in Ethiopia are likely to have a domino effect on the cost of goods and services, particularly in transportation, agriculture, and manufacturing sectors. Already grappling with food inflation and high logistics costs, consumers may soon feel the pinch unless counterbalancing measures are introduced.

Economists suggest that in the short term, this adjustment may increase operating costs for businesses that rely heavily on diesel and petrol. Public transport tariffs, commodity prices, and delivery costs could be impacted unless regulated.

Looking Ahead

As Ethiopia continues to transition toward a more liberalized economy while managing foreign currency constraints, fuel pricing will remain a sensitive policy lever. Long-term strategies may include accelerating investment in renewable energy, public transport infrastructure, and efficient fuel management systems to reduce dependency on imported fossil fuels.

The Ministry reaffirmed its commitment to periodic reviews of fuel prices in accordance with global trends and national economic realities, aiming to protect consumers while ensuring energy security for the nation.