Plastic bottles filled with a transparent, yellowish liquid have become a common sight on the roadsides of Mekelle, seat of the Tigray regional administration. The containers, once used for water, dotted the streets where Abraha Kahsay was busy prowling for passengers in his old Toyota on a bright, sunny day in early October.
The gasoline-filled bottles mark the locations of informal shops that have sprouted up all over Mekelle in the absence of functioning pumping stations.
The sight of these plastic receptacles is pervasive and serves as a testament to the fuel shortage crippling the northern city. Their ubiquitousness creates the impression that the thriving underground market has become part and parcel of daily life, if not technically legal.
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In stark contrast, gas stations across Mekelle are either out of stock or claim to be. Taxi drivers like Abraha spend several hours each week searching for benzene at the official rate, which has jumped to 91.14 Birr per liter in the weeks since the day he spoke with The Reporter Magazine. Often, the search is fruitless and they desperately turn to the black market, where traders sell fuel for more than 160 Birr a liter.
The prices are untenable but Abraha and his peers have little choice but to fill up their tanks.
“I can’t find gasoline at the stations anymore. We’re forced to buy from these [makeshift] shops, paying prices that are too high to sustain,” he said.
Even when they are open, gas stations do not allow drivers to pump more than 50 liters in one go, which Abraha says is scarcely enough to last him through a single day of work. He observes that of the 13 gas stations in Mekelle, only two are somewhat reliable.
However, even at these stations, the queues are extremely long, with cars waiting for hours, sometimes even days, to refuel. The stations also run out of stock within four days of delivery. At other stations, supply runs out within a single day.
“We’re wasting our time standing in line, hoping to find gasoline,” said Abraha.
The thriving underground market siphons off much of what little fuel makes its way to Mekelle, making it difficult for taxi drivers to earn a living. Abraha says he now relies on pick-ups at Mekelle’s Alula Aba Nega Airport, where arriving passengers can better afford the high fares he is forced to charge to make up for the skyrocketing fuel costs.
Abraha suspects that gas stations are selling fuel to illicit traders rather than supplying to drivers.
“I can’t charge passengers enough to cover the cost when I buy gasoline at 160 Birr per liter,” he said. The gasoline shortage has not only impacted his work but also drastically reduced his income.
The story is much the same elsewhere in the country.
Yayehyirad Ayano drives a Suzuki Damas model in Hawassa. He joined the taxi business shortly after graduating from Hawassa University. But, like many others in the southern city, he struggles to cope with the scarcity of fuel.
The municipal Trade and Industry Bureau has imposed a fuel rationing system in a bid to tame the crisis, but that has hardly made it easier for Yayehyirad to keep his car running. Hawassa’s drivers are limited to one, or sometimes two, refills a week at one of the city’s 15 stations.
The quota is insufficient for Yayehyirad, who uses up his Suzuki model’s 34 liter tank in three days.
To make matters worse, the queues at the pumping stations seem endless on designated filling days.
“When it’s my turn to refuel, we start queuing the night before,” Yayehyirad explains. “But even after hours of waiting, it’s possible there’s no gasoline left by the time it’s our turn.”
The long lines frequently lead to frustration and conflict among drivers, which sometimes causes gas stations to shut down temporarily. And even on the occasions that Yayehyirad does manage to reach the pump, station employees might tell him they have run out of fuel. Hours spent in queue often end with nothing to show for it.
Yayehyirad and his peers begin queuing as early as 9 p.m. for the chance to fuel their cars the next morning. Despite the long wait, only a quarter of the vehicles in line manage to get gasoline.
He told The Reporter Magazine that he suspects foul play at the gas stations.
“Sometimes the electricity goes off after a few cars are fueled,” Yayehyirad says. He believes gas station workers might be turning off the power to divert fuel to the black market. Gasoline on the black market sells for 170 Birr per liter, nearly double the rate at stations.
The black market has become a thriving alternative for those desperate to work. Yayehyirad claims that gas station workers sell gasoline to black market vendors late at night for 120 Birr a liter, who then resell it for 170 Birr or more. This illegal trade is open and unchecked, with little in the way of regulation or vigilance from authorities.
Despite complaints to officials, black market vendors continue to operate with impunity.
The Hawassa Trade Bureau updates its fuel schedule weekly, but the announcements are made at the last minute. The schedule is released through a Telegram channel just before fueling begins, leaving drivers like Yayehyirad waiting in queues, unsure if they will even have the chance to refuel that day. The lack of timely information wastes precious time for taxi drivers who depend on regular work to survive.
Yayehyirad recalls a particularly frustrating experience on October 7. He filled his tank to the brim with 34 liters of gasoline, which lasted three days. He worked steadily on Monday, Tuesday, and Wednesday, hoping that another refueling schedule would be announced for Thursday or Friday.
But the next available day for fueling wasn’t until Saturday, October 12. He spent the whole day in line, only for the electricity to go out at 3 p.m., leaving him without fuel. The result: three more days without work.
The gasoline shortage has become a burden not just for Yayehyirad, but for many of his friends who are struggling to make ends meet. Most of them have families to support, but without access to fuel, they cannot work.
Many taxi drivers, about 80 percent according to Yayehyirad’s estimation, do not own their vehicles. They pay monthly rental fees, and the gasoline crisis is squeezing their incomes to the point where they are living on credit from others.
Tesfaye Mengesha, another driver who owns a three-wheel rickshaw (Bajaj) taxi in Gambella, shares a similar story.
He often spends hours in line, only to walk away without gasoline. In Gambella, black market fuel prices reach as high as 200 Birr per liter.
Meanwhile, the federal government has banned the import of fuel-powered vehicles to reduce the amount of foreign currency spent on petroleum imports and relieve pressure on scant forex reserves.
Ethiopia spends an estimated USD 2.3 billion on fuel imports each year.
According to data from the National Bank of Ethiopia, the country imported close to 674,000 tons of fuel in 2021/22. The figure rose to nearly 707,000 tons the following year. Over the first half of 2023/24, Ethiopia shipped in 354,000 tons of fuel.
The government has moved to enact further cutbacks on fuel subsidies, which it claims cost more than USD 935 million annually. The decision comes as the Birr slides against the US Dollar following the decision to liberalize the foreign exchange market in late July.
Atlaw Alemu (PhD), an economics professor at Addis Ababa University raises the broader economic challenges caused by the country’s reliance on fuel imports. He notes that Ethiopia spends billions of dollars from its limited foreign exchange reserves to import fuel. This puts immense pressure on the national budget, as these foreign reserves could be better used for importing essential items like medicine or industrial inputs. Furthermore, with the recent currency floating and the subsequent depreciation of the Birr, the government is now forced to spend even more Birr to purchase the same amount of fuel.
The latest round of subsidy cuts saw retail prices for benzene jump to 91.14 Birr per liter from 82.60 Birr in early October. The price for a liter of diesel jumped by nearly seven Birr to 90.28 per liter.
A statement from the Ministry of Trade and Regional Integration reveals plans to enact similar quarterly subsidy cutbacks until retail prices sit near 117 Birr per liter for both benzene and diesel.
Atlaw warns that the sharp increase in fuel prices could have serious consequences for both the economy and the people. He highlights the significant rise in transportation costs, which will place a heavy burden on the population, especially on those with lower incomes. Unlike the past when fuel prices would increase gradually by small amounts, the current surge in prices is sudden and steep, and this shift is expected to have a substantial negative impact.
Atlaw explains that the increased fuel prices will also make cargo transportation more expensive. As a result, the cost of transporting goods will rise, leading to higher prices for other commodities. This effect will be felt across essential goods, making daily necessities more expensive for consumers. In addition, the rising fuel prices will affect industries that rely on machinery, such as factories and mechanized farms, he says. These sectors depend on tractors and other fuel-powered equipment, so the higher fuel costs will disrupt their operations. Atlaw says that the transportation service sector, in particular, will be severely impacted.
In the meantime, the Ethiopian Energy Authority (EEA), which is the regulatory body in charge of ensuring a sufficient supply of fuel, insists that there is no gasoline shortage.
Bekelech Kuma, the EEA’s public relations and communications director, says fuel distribution and the prevention of illicit trade fall solely under the purview of regional trade bureaus.
She claims the fuel crisis affecting Abraha, Yayehyirad, and Tesfaye is sustained artificially.
Nonetheless, the fuel shortage in Hawassa shows no signs of improvement, two years into the crisis. For drivers like Yayehyirad, the future remains uncertain. He struggles daily, not only to work but to support himself in an economy where fuel scarcity is now part of the daily routine.
The Ethiopian Petroleum Supply Enterprise, a state-owned enterprise with a monopoly on petroleum product imports, declined to provide information regarding the sale of fuel products in the country.
