Ethiopia increases oil prices

October 5, 2008 (ADDIS ABABA) — Ethiopian government has raised prices by more than five percent and public transport fares accordingly, the government said yesterday.

“The $800 million which the government was spending on fuel subsidies will be channelled to ease the spiralling cost of food grain during the current harvest season,” the Ministry of Trade and Industry said in a statement on Saturday.

According the new measure the price of regular petrol to 10.15 birr (0.75 euros or 1.05 dollars) per litre and that of kerosene to 8.59 birr (0.64 euros or 0.88 dollars).

Petrol pump prices had risen 20 percent in January to 9.61 birr (0.71 euros or 0.99 dollars).

The statement said the decision was made during a cabinet meeting on Friday when a report was submitted on the cost of fuel subsidies.

“The government has been subsidising fuel and during the past three years it spent more 7.7 billion birr ((574 million euros or 794 million dollars) in petroleum subsidies,” it said.

The ministry of transport and communication simultaneously announced that public transport fares would rise.

(ST)