This is Ethiopia’s second major oil price increase in a little over a month. Some oil products have seen over 34 percent increases
By: Getahun Tsegaye
Staff Reporter
Addis Ababa, Ethiopia-The Ministry of Trade and Regional Integration of Ethiopia has announced a new adjustment to fuel prices, effective as of 6 p.m. on May 8, citing changes in global oil markets. This marks the latest revision in a series of price adjustments that began in October 2023. Since then, most petroleum products have seen notable increases in retail prices, impacting both consumers and businesses across the country.
According to the Ministry’s statement, the price of gasoline has risen from 91.00 birr per litre in October to 122.53 birr in May—representing a 34.6% increase. Diesel, also referred to as Light Black Naphta, increased from 90.00 birr to 106.77 birr per litre, reflecting an 18.6% rise. Kerosene and White Naphta each saw prices climb from 90.00 birr to 116.49 birr, an increase of 29.4%. Heavy Black Naphta experienced a more modest rise from 104.08 birr to 106.77 birr, amounting to about 2.6%. In contrast, Jet Fuel saw a slight reduction in price, dropping from 113.20 birr per litre in January to 109.56 birr in May, a decrease of approximately 3.2%. While most fuel types have become more expensive since October, the slight decline in Jet Fuel and minimal change in Heavy Black Naphta stand out in the latest adjustment compared to earlier ones, such as that in January 2024. Notably, the government introduced a major price hike for oil products in March this year.
An independent economist, speaking anonymously to Borkena, noted that the new price increases are likely to further aggravate Ethiopia’s inflation rate, which has already been running high. Because fuel is a foundational input for transportation and distribution, increased prices are expected to have a cascading effect on the cost of food, manufactured goods, and essential services. This development comes as the country continues to grapple with broader economic challenges, including currency depreciation and external debt pressures.
As of early 2025, Ethiopia’s year-on-year inflation rate remains high. According to the Central Statistics Agency, inflation stood at around 28% in March, with food and transport costs as major contributors. Urban households, in particular, are facing increasing financial strain as wages remain largely stagnant while the prices of basic goods and services continue to rise.
In the transportation sector, reactions have been swift. A minibus conductor who identified himself as Biniam explained that taxi associations have not yet received updated fare structures from the relevant authorities. However, he indicated that informal fare increases are already being implemented. “Although no official adjustment has been made, we cannot continue operating at a loss,” he said. “We understand it may not be legally sanctioned, but there is little choice until official changes are issued.” Similar informal fare hikes were observed during the January fuel price adjustment, reflecting ongoing challenges in synchronizing fuel policy changes with regulated transport systems.
Based on views from the ruling Prosperity Party, the broader context for these fuel price increases lies in Ethiopia’s gradual phasing out of fuel subsidies, a move that is part of wider economic reforms aimed at liberalizing the economy. While these measures are intended to reduce fiscal pressure and attract investment, the resulting impact on retail fuel prices has become a source of public concern. As household budgets come under increasing pressure, the economist cautions that without supportive fiscal policies or targeted subsidies for vulnerable populations, the cost of living will continue to rise, potentially leading to broader socio-economic instability.