Ethiopia has announced an indefinite suspension on the issuance of new gas station licenses across the country.
The National Oil and Energy Authority has confirmed the halt, citing the need to reassess the current direction of gas station expansion.
Director General of the Oil and Energy Authority, Mrs. Sahrela Abdullahi, stated that while the government has been actively working on expanding oil stations, it has recognized that the current approach is flawed.
As a result, the licensing process has been suspended indefinitely.
Mrs. Sahrela emphasized that the authority is conducting a comprehensive study to address the issues related to licensing and accessibility of gas stations.
Once these problems are resolved, the licensing process will resume, with a particular focus on areas currently lacking gas station access.
However, Mrs. Sahrela did not specify a timeline for when the licensing will resume, noting that thorough research is required to ensure the process is effective and beneficial.
In a related discussion with loyal taxpayers a month ago, Prime Minister Abiy Ahmed highlighted that Ethiopia spends $4 billion annually on fuel purchases.
He stressed that this expenditure is unsustainable and announced government support for investors to import and assemble electric vehicles domestically.
As part of this initiative, Ethiopia has banned the importation of fuel-powered vehicles and introduced a 35 percent tax reduction for importing or selling electric vehicles.
Ethiopia relies entirely on foreign imports for its fuel needs and has historically subsidized fuel to keep transportation costs manageable.
However, the Ministry of Transport announced last year that it would gradually reduce and eventually eliminate these subsidies due to increased government spending and financial constraints.
The cessation of fuel subsidies began a year ago for companies not providing public transport services.
It has now been extended to include vehicles that do provide public transport. The Fuel and Energy Authority announced that subsidies for minibus vehicles, which have been in place since 2023, will end in March 2024.
This move is part of a broader government strategy to phase out subsidies on oil products and increase the selling price to reflect true market costs.
The government aims to ensure that the subsidy system benefits the community effectively, addressing concerns that the current system does not adequately serve public needs.
