• Government to phase out fuel subsidies for petrol and diesel by February 2026. 

• Policy aims to raise retail petrol and diesel prices to cost-recovery levels. 

• Subsidy removal part of broader cost-recovery and economic reform agenda. 

• Phase-out follows IMF advice to end fuel subsidies under reform programs. 

• Previous subsidy elimination moves included partial diesel/petrol price deregulation in 2025. 

• Reform expected to reduce government fiscal burden from subsidised fuel. 

Why it matters?

Phasing out fuel subsidies shifts price setting to market signals and is scheduled by February 2026. The policy affects transport and logistics cost structures and public finances. It stems from IMF-linked reform directives to lower fiscal pressure. The  steady rise of fuel prices has been the single fundamental factor for cost increment across diverse sectors in the Ethiopian market.