Drivers Stranded Between Parched Pumps and Policy Pipe Dream

Apr 4 , 2026.

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Fuel stations across the country, especially in Addis Abeba, have become the stage for a grim new ritual. Lines of vehicles now stretch for as long as two and a half kilometres.

Motorists spend entire nights in their cars. Some wait almost a full day, only to be told that the fuel has run out a few vehicles short of the pump. That small scene, weary and absurd as it may appear, is the domestic face of a wider energy shock whose origins lie far beyond the forecourt.

The immediate cause is geopolitical. The latest Middle East crisis has shaken global energy routes, particularly around the Strait of Hormuz, a vital artery for oil exports. As the conflict involving the United States, Israel and Iran deepens, the interruption of supply has reached the Horn of Africa with unusual force. If even big industrial economies are feeling the strain, poor import-dependent countries have fewer cushions. In Britain, Prime Minister Keir Starmer has warned of the damage to the economy and the likely rise in living costs.

For countries like Ethiopia, with less economic strength and diplomatic leverage, the pain is harsher and more immediate.

The closure of the Strait of Hormuz has blocked the daily flow of 140 million barrels from major producers such as Saudi Arabia, Kuwait and the United Arab Emirates (UAE). For Ethiopia, the effect is direct. Under a standing agreement with Kuwait, it normally sources 60pc of its diesel and all of its jet fuel from Gulf suppliers. The rest is bought through international tenders. Until recently, that system was predictable enough. A long-term contract with Kuwait, set to run until December 2026, sets logistics premiums at 9.25 dollars a barrel, subject to annual negotiation.

That arrangement has now broken down, with three vessels bound for Ethiopia, carrying 120,000tn of diesel and 60,000tn of jet fuel, stranded in the Arabian Gulf. Cut off from Kuwaiti supply lines, federal trade officials were forced into the spot market, where emergency purchases came at punishing cost. A procurement system built around relative stability has been replaced by costly short-term buying. Recent tenders pushed premiums to 86.33 dollars a barrel for jet fuel and 92.88 dollars for diesel. That is far above the 10.99 dollars and 13.99 dollars premiums previously charged by Vitol, which had won the latest annual tender on 360-day credit terms.

As the gap widens between international buying prices and local retail rates, the subsidy bill has risen above 272 billion Br. Before the latest adjustment, the state was subsidising each litre of diesel by 95 Br when it sold at 139.84 Br, and each litre of gasoline by 42 Br when it sold at 132.18 Br. Federal officials, such as Ahmed Shide, minister of Finance, now claim such support cannot continue.

Last week, the government raised pump prices again. Gasoline climbed to 142.21 Br a litre and diesel to 163.09 Br. Kerosene jumped to 151.39 Br and jet fuel to 150.48 Br. Yet even after those increases, federal officials claim diesel is still subsidised by 71 Br a litre and gasoline by 32 Br. Without support, they argue, diesel would cost 234.17 Br and gasoline 174.40 Br.

Price rises have been accompanied by rationing. Kassahun Gofe (PhD), the minister of Trade & Regional Integration (MoTRI), has introduced a priority system for gas distribution. Fuel tankers, import and export logistics, manufacturing, mechanised farms and public transport are to be served first. Health services, telecommunications and humanitarian operations are also high on the list. A task force has been set up to oversee distribution, while ministers urge the public to conserve fuel.

The Prime Minister, Addis Abeba’s Mayor and the Transport Minister have all promoted electric vehicles, hybrid charging, carpooling and greater use of natural gas in public transport.

On paper, that sounds sensible. In practice, however, it exposes the distance between official ambition and economic reality.

Ethiopia’s dependence on imported fuel, reaching four million tonnes, is deep, but the alternatives now being promoted are expensive or underdeveloped, if not ineffective. Electric vehicles remain beyond the reach of most households already squeezed by inflation and falling purchasing power. Hybrid owners face another constraint in an environment where charging infrastructure is widely unavailable and unreliable. Natural gas is no easy answer either. With no more than two refineries reportedly operating, supply remains too limited for rapid expansion.

The state is asking citizens to adjust faster than infrastructure and incomes allow.

That raises the risk of shifting the burden of crisis management onto people least able to bear it. Many rely on old and fuel-dependent vehicles for work and daily movement. If shortages worsen, officials may be compelled to return to earlier crisis tools. During the pandemic, transport was controlled through licence-plate shift systems that rationed road access. If a similar measure returns, it may reduce demand for a while, but it would also disrupt businesses and narrow mobility in an already strained city.

There are, however, immediate ways to consider softening the strain. Large organisations with heavy transport needs could reduce fuel use through remote work and flexible schedules. Tighter rules for heavy-load transport, better route planning and more efficient allocation would also help. Diplomacy matters, too. Iranian authorities have said they are willing to grant safe passage through the Strait of Hormuz to fuel carriers from countries that keep a neutral position in the war. That should signal that foreign-policy choices may have direct effects on Ethiopia’s fuel security.

Federal officials are right to admit that scarcity, not comfort, now defines the problem. They are justified by their outlook that essential services, food transport, water systems, ambulances, logistics operations and public buses should take precedence over private cars. Long queues reward only those with time, luck or connections. A crisis this sharp needs rules that are clear, narrow and enforceable.

However, awareness is not a policy, and the test is whether ministers can manage shortages honestly, protect the most productive uses first and discourage hoarding quickly. In a shock of this kind, every litre should not be viewed equally. Policymakers should move beyond vague appeals to patience.

The authorities cannot wish away a fuel shortage. They can only govern one better.

An allocation system, tied to licence plates, business permits, or transport categories, and deducted digitally at the pump or through SMS vouchers, would at least distribute scarcity by rule rather than by chance. Essential fuel streams for hospitals, water pumping and telecom towers should be ring-fenced from ordinary retail supply, with sealed depot tanks and direct dispatch to named users. Without that separation, broad subsidies risk leaking into speculative networks.

On prices, the sensible target is not an unsustainable blanket cap but tighter control of distributor and retailer margins, with taxes eased temporarily when import costs surge. Retail rules also need to change. Per-transaction caps, a ban on roadside jerrycan sales in many towns and stricter station logs would do more to calm panic buying than speeches about restraint. The underground market should be made harder to operate by implementing geofenced tanker tracking and publishing daily depot-to-station delivery records.

Universal subsidies should give way to a lifeline fuel basket for socially critical users. And one authority, bringing together the ministries of Trade and Transport, the Central Bank, and Customs, should run a daily fuel war room. In a shortage, opacity breeds anger, while clear allocation bulletins at least give hardship a visible logic to the public.

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PUBLISHED ON Apr 04,2026 [ VOL 27 , NO 1353]

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