The federal government is tightening criteria for fuel allocation in an attempt to navigate the uncertainty posed by the Iran War, as authorities introduce measures to curb wastage and inefficiency in the supply chain.
New fuel consumption rules announced by officials from the Petroleum and Energy Authority this week include priority for security and defense, crucial public projects, manufacturers and exporters, commercial farms, and public transport.
Entities falling under any of these categories gain priority access to fuel from the state-owned Ethiopian Petroleum Supply Enterprise (EPSE), which holds a monopoly on fuel imports, and distributors.
Fuel remains Ethiopia’s largest import expenditure, accounting for a quarter of its total import bill at an estimated USD 4.2 billion a year.
From The Reporter Magazine
Ethiopia imports nearly all of its refined petroleum products, with a substantial share sourced from Gulf suppliers, according to the International Energy Agency. These shipments typically travel via maritime routes connecting Gulf export terminals to the Port of Djibouti—Ethiopia’s principal maritime gateway.
This week, Transport Minister Alemu Sime (PhD) highlighted the uncertainty facing Ethiopia as a result of the war in Iran and the closure of the Strait of Hormuz.
“As a result of the conflict in the Middle East, countries like Ethiopia which import fuel are facing difficulties in accessing fuel and petroleum products. Therefore, available fuel sources must be utilized only for priority functions until the situation in the Middle East stabilizes,” said the Minister.
From The Reporter Magazine
He noted that Ethiopia is not the only country facing the prospect of disrupted supply.
“All countries in the region are facing this problem. But because Ethiopia is landlocked, the problem is more pronounced. We have to manage this time wisely. There is a fuel shortage in Ethiopia. At the same time, prices have surged. Even if we can access the fuel, we can’t afford to buy it because international prices have already surged. The government is still subsidizing fuel in billions of Birr. Citizens must also take measures,” said Alemu.
He called on citizens to shift towards public transport, urged the quicker adoption of electric vehicles (EVs), and encouraged businesses and individuals who own multiple vehicles to cut down on use.
“This is a sacrifice for the public and the country. These are solutions to conserve scarce fuel and the foreign currency it’s costing us now,” said Alemu.
Officials also want to phase out diesel-powered heavy trucks in favor of electric ones or vehicles powered by compressed natural gas (CNG).
Meanwhile, federal police took Esmelealem Mihretu, CEO of the Petroleum Supply Enterprise, into custody last week. Insiders told The Reporter that his arrest is related to supply diversions.
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