Public transportation fares in Addis Abeba increased two-fold following last week’s fuel price hikes, marking the first fare adjustment in a year. The decision from Addis Abeba Transport Bureau comes on the backdrop of escalating fuel costs a fortnight ago with officials citing it as a key driver.

The Bureau’s tariff revision is the first in over a year. Officials believe while fuel prices play a major role, other factors such as maintenance costs and spare parts were also considered. According to Dagnachew Shiferaw, deputy head for transport operations, public transporters were dismayed with minimal profits.

"They were on the brink of exiting the market," he said.

He is optimistic that the new structure will ensure a steady supply of public transportation.

Minibus fares for less than 2.5Km distances have jumped from 4.5 Br to 10 Br, with other fares increasing between 26pc and 76pc. Midibuses saw fare hikes between 36pc and 43pc, while city buses experienced a moderate increase, with the shortest distance fare remaining at 10 Br for up to 12Km. However, longer routes have seen fares rise by five Birr.

Ahmed Tusa, senior adviser of the minister of trade and reginal integration said that the government's fuel subsidy program, costing 300 billion Br and covering 80pc of diesel and 75pc of gasoline prices, was designed to alleviate the burden.

Taxi transporters have dwindled by half to nearly 5,000. Authorities hope the new tariff structure will prevent drivers from quitting and ensure a steady supply of public transportation.

Berta Dawit, a transport sector expert, noted multiple factors that influence transport fare adjustments, including vehicle purchase prices, fuel costs, depreciation, spare part expenses, and maintenance fees. He said that additional considerations, such as a vehicle’s revenue based on distance and capacity are shaped by the current market value of drivers' and assistants’ wages.

He argues that if fares were left to the free market, prices would have become unaffordable. Berta also noted the deteriorating condition of many taxis and midibuses as a sign that previous fares were too low. He said older models can only travel six kilometres for a litre while newer models achieve up to 18Km. Berta suggested that the Transport Bureau conduct thorough research into their root causes. He explained that low tariffs often lead to illegal fare increases and stressed the importance of regular tariff updates to address this issue.

He points to the policy promoting electric vehicles as a potential solution. Berta argued that the widespread adoption of electric vehicles could stabilise transport costs by lowering fuel consumption and related expenses. However, he underlined incentives, such as duty-free spare parts, to make this shift feasible.