The Ethiopian government has provided substantial subsidies to ensure a reliable supply of strategic commodities, including fuel, according to Finance Minister Ahmed Shide. He stated that over the past years, the government has subsidized fuel with over 267 billion Birr, and an additional 100 billion Birr has been allocated in the current budget year.
Ahmed explained that following the implementation of comprehensive macroeconomic reforms, significant efforts are underway to strengthen economic reform and contribute to economic growth. These reforms have led to improvements in foreign exchange acquisition, strengthened development partnerships, enhanced export performance, increased bank savings, and overall improved performance across various sectors. Measures have also been taken to mitigate potential price increases resulting from market-determined exchange rates, to prevent undue pressure on the public.
The government's substantial subsidies extend beyond fuel to include fertilizers, medicines, essential goods, and urban and rural development safety nets, totaling over 400 billion Birr annually. These subsidies are implemented carefully and responsibly to minimize societal impact.
The government allocates $4.5 billion annually to ensure a reliable fuel supply, importing fuel at global prices and then selling it domestically at a subsidized price below both global and neighboring countries' rates. This means every consumer benefits from government subsidies on fuel purchases. The government is committed to maintaining this effort and is working to prevent fuel smuggling to neighboring countries through the establishment of a task force. Efforts to modernize the fuel distribution system are also ongoing.