Fuel scandals grip Ethiopia and Kenya

Ethiopian authorities have arrested 658 individuals, including public officials, over their alleged involvement in illegal fuel trading and stockpiling, as the country grapples with a deepening fuel shortage. More than 720,000 liters of fuel have been confiscated and returned to state control, according to Addis Standard.

Authorities said a series of coordinated operations uncovered widespread smuggling and hoarding networks, describing the activities as a “form of economic sabotage.” Security forces intercepted contraband fuel along major transport routes and seized large quantities across several locations, including Addis Abeba, the Amhara region, and parts of southern Ethiopia.

Alongside these enforcement efforts, a major corruption case is unfolding involving senior figures in the energy sector. Addis Standard reported that the prosecutors allege that government officials and private actors “colluded to divert fuel supplies, manipulate the market, and create artificial shortages for profit.” Evidence presented includes the disappearance of dozens of fuel tankers and the illegal allocation of fuel to unlicensed entities. Authorities also claim the scheme bypassed digital payment systems, enabling billions of birr worth of fuel to be sold on the black market, undermining government revenue and pushing a significant share of transactions into an unregulated shadow economy.

The latest developments follow the government’s earlier emergency measures to address the fuel shortage, which has been exacerbated by global supply disruptions linked to escalating war between Iran, the United States, and Israel. State institutions have been directed to reduce fuel consumption through measures such as shifting to virtual meetings, enforcing carpooling, limiting official vehicle use, and cutting fuel allocations for senior staff. At the national level, the Ethiopia Petroleum and Energy Authority has issued directives mandating strict conservation practices, prioritizing fuel access for essential sectors such as healthcare, agriculture, and public transport, while tightening oversight of supply chains and cracking down on illicit trade.

Meanwhile, Kenya has been rocked by a similar fuel-related scandal. The country’s petroleum sector has been thrown into turmoil following a scandal that led to the resignation of three senior officials: the Petroleum Principal Secretary, the Managing Director of the Kenya Pipeline Company, and the Director General of the Energy and Petroleum Regulatory Authority. Their resignations were accepted after allegations of serious misconduct in the management of fuel supply operations emerged, raising concerns at the highest levels of government about integrity and accountability in the sector.

At the center of the Kenyan case are accusations that fuel stock data was deliberately manipulated to create the impression of an impending shortage. Investigators believe this false narrative triggered public concern and was used to justify emergency fuel imports. According to the statement released by the Kentan government, the procurement processes for these imports bypassed established procedures, resulting in inflated costs and questionable fuel quality. Several private firms linked to the shipments, along with their executives, are now under investigation for potential financial irregularities and violations of procurement regulations.

The Kenyan government has condemned the alleged actions as a “serious breach of public trust,” warning that such conduct may “constitute economic crimes under national law.” Investigations have been handed over to relevant agencies, with the Directorate of Criminal Investigations leading a broad inquiry involving both public officials and private sector actors. DCI has made it clear that resignations do not exempt individuals from legal responsibility, and those found guilty will face prosecution.

The ongoing crisis across multiple countries in the region has been driven in part by disruptions to global energy supply routes, particularly around the Strait of Hormuz, a critical passage for a significant share of the world’s oil shipments. As a result, global fuel prices have surged, placing additional pressure on already vulnerable economies.

Countries across the Horn of Africa have felt the immediate impact due to their heavy reliance on imported fuel. Ethiopia and Kenya are not alone; the effects are being felt across the region, with rising prices and reduced availability. Somalia is also experiencing escalating fuel costs, disrupting livelihoods - particularly in the informal sector, where transport operators and small businesses are struggling with rising expenses and declining demand. Djibouti is likewise under pressure as it attempts to carefully manage fuel reserves to avoid shortages.

With no clear resolution to the geopolitical crisis driving the crisis, and continued risks to major shipping routes, the Horn of Africa remains highly exposed to prolonged external shocks that could deepen into a wider humanitarian and economic crisis.

The recent fuel scandals highlight how these global conflicts are distorting already fragile regional economies, exposing weaknesses in governance systems and enforcement frameworks that leave them particularly vulnerable to exploitation and crisis.