Ethiopia Launches Crackdown on Illegal Fuel Trade as Government Expands Subsidies

The government of Ethiopia has launched a nationwide crackdown on illegal fuel trading while expanding subsidies to cushion consumers from rising global oil prices linked to tensions in the Middle East.

Finance Minister Ahmed Shide announced the measures on Wednesday, describing the surge in global fuel prices as “frightening” and outlining a series of actions aimed at stabilizing supply and protecting consumers.

The government’s response includes additional fuel purchases to prevent shortages, expanded subsidies to limit price increases, and stricter enforcement against traders selling fuel above official prices or outside authorized distribution systems.

Subsidies Continue Despite Price Adjustments

Earlier this week, authorities adjusted domestic fuel prices. White diesel increased by 10 birr to 139.84 birr per liter, while gasoline rose by 3 birr to 132.18 birr per liter.

Despite the increases, the government says fuel prices remain heavily subsidized. According to the Ministry of Finance, gasoline is currently subsidized by 73.56 birr per liter, while white diesel is subsidized by 98.29 birr per liter compared with delivery prices at the Port of Djibouti, Ethiopia’s main fuel import gateway.

Fuel imports are among the country’s largest foreign-currency expenditures, with Ethiopia spending more than 4.2 billion US dollars annually to secure petroleum supplies.

Illegal Fuel Diversion Targeted

Authorities say investigations revealed that subsidized fuel has been diverted from the official supply chain and resold at inflated prices in informal markets, contributing to artificial shortages and higher consumer costs.

The government has begun legal actions against traders and individuals involved in unauthorized fuel sales.

Ahmed said enforcement efforts will target all actors involved in the illegal supply chain, including collaborators operating outside the government’s regulated distribution system.

Supply Disruptions and Shortages

Fuel supply challenges have intensified in recent weeks following disruptions to global energy shipments linked to tensions around the Strait of Hormuz, a critical global oil shipping route.

Drivers in cities including Addis Ababa, Mekelle, Jimma, Ambo, and Bahir Dar have reported long queues at fuel stations and limited supplies.

The situation has raised concern in several regions. Health authorities in Tigray Region warned that ongoing fuel shortages could disrupt the delivery of medical supplies and threaten the operation of healthcare facilities.

Conservation Measures Under Consideration

The finance minister called on businesses and households to conserve fuel while the government works to stabilize supply. Officials are also evaluating additional measures aimed at reducing fuel consumption and improving distribution efficiency.

Authorities say efforts are underway to secure alternative supply routes and maintain adequate fuel reserves as uncertainty continues in global energy markets.