Fuel is one of the major products that Ethiopia imports and holds a significant portion of the entire import – It accounted for 13.58% of total imports in the 2020/21 budget year which is the largest share for a single product.
The war in Ukraine has spiked fuel prices internationally. Currently prices are just over $100 a barrel. This increase is expected to push the import bill to unprecedented levels in the upcoming 2022/23 budget year. The Ethiopian Petroleum Supply Enterprise estimates the cost to spike to USD5.6B which is double what the country incurred in the 2021/22 budget year.
The spike will put more strain on the economy as it will likely widen the country’s trade deficit unless export performance weathers the impact.