Ethiopia Bolsters Fuel Subsidies Amid Rising Global Oil Prices

Ethiopia has announced a substantial hike in fuel subsidies to shield its economy from escalating global oil prices, a direct result of the ongoing conflict involving Iran. The Finance Ministry detailed these measures in a state media report on Wednesday.

According to the Ethiopian Broadcasting Corporation's social media update, the government has raised the diesel subsidy to 98 birr per litre from the previous 53.68 birr, while the subsidy on petrol will be increased to 73.56 birr per litre, up from 28.77 birr. This adjustment comes as diesel retails at 139.84 birr per litre and petrol at 132.18 birr.

The Ethiopian government has earmarked a substantial 100 billion birr ($651.94 million) for these fuel subsidies in its 2025/2026 fiscal plan. The global oil price surge, attributed to the Iran conflict, has been further aggravated by disruptions in the Strait of Hormuz, a critical channel for global oil shipments.