Updated February 13th, 2024 at 14:20 IST

Ethiopia halts import of petrol, diesel run cars

The new policy is unclear on when it will come into effect and it does not clarify whether vehicles in transit from overseas are subject to it either

Business Desk
Ethiopia halts import of petrol, diesel run cars | Image:Ethiopia halts import of petrol, diesel run cars
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Vehicle Ban: In a move to fasten its zero-emission travel ambitions, Ethiopia announced a ban on the entry of non-electric vehicles (EVs).

Alemu Sime, Ethiopia's Minister of Transport and Logistics, said, “A decision has been made that automobiles cannot enter Ethiopia unless they are electric ones.”

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A pertinent reason behind this is the African nation's inability to afford importing gasoline due to limited foreign exchange resources, the Minister said.  

The country has become the first nation in the world to announce such a policy. This move puts the developing country one step ahead of many European countries, and even India's target for zero-emission mobility.

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Petrol, diesel vehicle ban

The new policy is unclear on when it will come into effect and it does not clarify whether vehicles in transit from overseas are subject to it either.

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In addition, whether this will affect carmakers such as Hyundai, Nissan, Isuzu, Lada and Volkswagen, who already have local assembly plants and produce ICE (internal combustion engine) vehicles and EVs, is uncertain, as per an Auto Car India report.

Most of these manufacturers import kits into the country and have them assembled at their respective joint-venture facilities, it said.

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Push for EVs, renewable energy

Along with reducing its dependence on imported fuel, the country spent almost USD 6 billion, about Rs 49,800 crore, on fossil fuel imports in 2023.

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Ethiopia is also working on investing in its energy infrastructure, specifically, from renewable sources.

Despite major barriers such as low income, an undeveloped car loan system and emerging EV charging infrastructure, the Union Minister said it would be cheaper and easier to run EVs than ICE vehicles.

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The country’s ability to import oil and other raw materials has been exacerbated with a shortage of foreign currency.

“Electricity is produced in Ethiopia and again, the price of electricity is cheaper compared to fuel,” noted Sime. “Ethiopia is a supporter of green development, and it is a country that is working hard for that.”

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In 2022, the ministry had implemented a ten-year plan to support the import of at least 4,800 electric buses and 1,48,000 electric cars, and also cut VAT, surtax and excise tax on EVs.

EV expansion

In a country where the total number of registered cars is just about 1.2 million, moving from ICE models to EVs would be considerably easier.

In fact, considering that there is an emerging middle class from its total population of over 1.2 crore (Ethiopia is the second-most populous nation on the African continent), there is potential for EV markers to enter, especially with the incentives in place.

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Published February 13th, 2024 at 14:20 IST