The past several weeks have been something of a nightmare for the Ethiopian transport and logistics sector, which finds itself in the throes of a severe fuel squeeze brought on by the war in Iran and the closure of the Strait of Hormuz.
With limited reserves, Ethiopia faces immediate forex strain, increased transport costs, and supply chain disruptions, forcing the country to accelerate renewable energy transitions and seek alternative supply sources.
Meanwhile, videos circulating on social media show truck drivers all over the country stuck in place as they wait to fill their tanks, while others depict them dumping full loads of rotten produce that had no way of making it to market from farms.
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In Addis Ababa, the crisis makes itself visible in the form of queues at pumping stations, sometimes stretching several kilometers, and long lines of people waiting for increasingly rare public transport.
And while Ethiopia is by no means the only country suffering from fuel scarcity as a result of the war, the global nature of the crisis offers little condolence to the ordinary citizens whose lives are being affected.
“The queues are endless,” said Sisay Birhanu, who drives for a taxi-hailing service in the capital. “If this continues, I don’t know how I’ll survive. My income is shrinking while costs keep rising.”
Hilina Shiferaw, a resident who depends on public transport to get to work, notes that tariffs have spiked.
“I used to pay 20 Birr to go to work from Bole to Arat Kilo. Now it costs me 40 Birr,” she told The Reporter Magazine. “There are long queues in the morning and after work hours, so I walk long distances every day, which is exhausting.”
Reports indicate that underground fuel retailers, who had already had a firm grip on supply in rural areas prior to the squeeze, have responded by hiking prices up to 500 Birr or more for a liter of benzene.
Experts like Molla Alemayehu (PhD), a senior researcher at the Ethiopian Economics Association, highlight the seriousness of the crisis.
“Fuel means everything to the economy,” he said. “You can see the long queues at fuel stations. If this persists, the impact will be significant. Factories will halt production, transportation will be interrupted, and even moving already-produced goods will become impossible.”
He explains that inflation has been worsened by fuel-induced price hikes, creating a multiplier effect across sectors. Markets are already responding, with agricultural products being particularly hard hit.
“Food prices are rising because farmers can’t transport their products. We’re paying more for everything, from potatoes to cooking oil, and the shortage of transport makes life harder for ordinary people,” said Zeyneb Ahmed, a trader in Addis Ababa’s Shola Market.
Commodities like potatoes, onions, and carrots have already seen price hikes of up to 80 percent.
“If this problem continues, the consequences will be devastating,” said Molla.
Government officials have called on the public to conserve fuel and granted priority allocation to public transport and vehicles tied to ongoing projects. More recently, all public institutions and state-owned enterprises were instructed to put non-essential employees on leave.
The economist, however, is skeptical about how effective this approach can be.
“People were never using fuel extravagantly. It has always been for essential purposes,” said Molla. “Simply telling people to save fuel will not solve the crisis.”
He argues that effort would be better spent in prioritizing allocation to critical sectors.
“This could mitigate the worst effects,” said Molla. “If the shortage persists, the economy could face total dysfunction. Rationing fuel for priority sectors is the only immediate step to prevent collapse.”
Rationing and other measures are already being implemented in Asian countries, where the fuel squeeze is being felt hardest.
The Philippines has declared a national emergency. Pakistan has closed schools and urged working from home. Airlines in Vietnam, Japan, and Korea have introduced refueling restrictions and cancelled flights. India has cut gas supply to manufacturers in favor of household needs.
A reported 90 percent of Asia’s oil passes through the Strait of Hormuz, necessitating austerity.
Ethiopia’s exposure, however, is not limited to the Strait itself. Nearly all of its petroleum imports come through Djibouti, and, while efficient under stable conditions, this logistical concentration represents a structural chokepoint during periods of regional turbulence.
The threat posed by pro-Iran Houthis in Yemen is particularly concerning.
The group could potentially disrupt shipping through the Red Sea, as they did at the height of Israel’s war on Gaza. With the Strait of Hormuz already closed, a sustained disruption in the Red Sea and the Bab el-Mandeb Strait could have catastrophic consequences for Ethiopia as well as global energy supply.
On March 28, the Houthis launched their first attack on Israel since the Iran war began, making the prospect of disruptions in the Red Sea likely in the coming weeks.
How Ethiopia will deal with this remains to be seen.
Ambassador Tefera Shawl, a diplomat whose career spanned across three regimes, observes the war in the Middle East is fundamentally economic.
“Control of oil and resources is at the heart of it. Ethiopia, though not part of the conflict, is paying the price,” he said, warning that Ethiopia’s reliance on imports from the Gulf makes it particularly vulnerable.
Alternative sources, such as Nigeria, would require longer and costlier shipping routes around the Cape of Good Hope, notes the diplomat.
“If we had developed our natural gas reserves 20 years ago, this crisis would not be so severe. Now, every imported item—from fertilizers to industrial goods—will cost more, and food prices will continue to rise,” he said.
He sees peace as the only way out of the crisis.
“A ceasefire in the Middle East is essential. War drags on because of tactics, not weapons. But without peace, Ethiopia and many other nations will continue to suffer,” said Tefera.
The prospect of peace, however, seems unlikely in the near term despite claims from the Trump administration to the contrary. Air strikes continue on both sides, and the price of a barrel of crude has settled above USD 100 for the first time since mid-2022.
Experts who spoke to The Reporter Magazine argue that waiting for the war to end would be a mistake, urging the government to adopt a comprehensive system of austerity and control to stabilize the economy and protect citizens from further hardship.
Some call for a state of emergency to be declared in a bid to regulate the distribution and pricing of essential supplies. They see the cultivation of a culture of saving and rationing as vital, and urge that public awareness campaigns are vital to navigating the crisis.
Experts also argue that strict legal measures must be enforced against unjustified price hikes, hoarding of goods, and the distribution of substantiated or adulterated supplies. Without accountability, opportunistic profiteering will deepen the crisis and further erode public trust, they warn.
