The National Bank of Ethiopia has introduced a new directive allowing embassies, international organizations and foreign direct investors to import fuel using their own foreign currency, in a move aimed at easing pressure on the country’s strained foreign exchange system.
The directive, signed by National Bank Governor Eyob Tekalign and effective as of 29 May 2026, permits eligible institutions to bring in refined petroleum products under the Franco-Valuta system, which allows imports without drawing foreign currency from Ethiopia’s domestic banking system.
Officials and industry experts say the new framework is designed to help stabilize the macroeconomy by reducing pressure on foreign currency reserves while keeping imported fuel out of the domestic retail market. Under the directive, fuel imported through Franco-Valuta cannot be sold to the public, transferred to third parties or mixed with ordinary commercial fuel supplies.
For more than five decades, the state-owned Ethiopian Petroleum Supply Enterprise was the sole legal importer of refined petroleum products. It was responsible for assessing national demand, negotiating purchases, managing tenders and overseeing strategic fuel depots. Fuel distributors and gas stations have traditionally bought from the state enterprise rather than importing independently.
That centralized system helped the government control fuel supply and retail prices, but it also left Ethiopia highly exposed to external shocks. Fuel is the country’s largest import item, costing an estimated $4.2 billion a year and accounting for roughly a quarter of total imports.
The latest directive comes as fuel markets have been hit by international disruptions, including conflict in the Middle East and pressure on strategic shipping routes such as the Strait of Hormuz. For landlocked Ethiopia, the problem has been compounded by a chronic shortage of foreign currency, making it difficult to finance timely fuel purchases.
In recent months, the government has been forced to provide billions of birr in fuel subsidies, but that approach has proved increasingly difficult to sustain. Authorities have also introduced a quota system that prioritizes fuel for defense, public transport and key manufacturers, while ordinary motorists in Addis Ababa have often faced long waits at filling stations.
The new Franco-Valuta directive is intended to provide an additional channel for fuel supply without putting further strain on the banking system. Franco-Valuta is a mechanism that allows eligible importers to pay with foreign currency held abroad rather than requesting hard currency from Ethiopian banks.
The National Bank said previous regulations had allowed some Franco-Valuta practices but lacked a clear legal framework. It said that gap had contributed to customs misclassification, distorted reporting, capital control violations and illicit financial flows.
Under the new rules, fuel imported for the own use of embassies, international organizations and foreign investors has now been explicitly added to the list of goods that may be brought in through Franco-Valuta. However, the bank stressed that the arrangement does not open the general fuel market to private traders.
To clear fuel through customs, importers must present a supporting letter from the relevant government institution confirming their fuel needs, along with a valid diplomatic or investment license. The directive does not set a specific dollar ceiling for fuel imports, saying volumes will be determined by the issuing institution’s assessment of need.
The bank has also established a digital monitoring system to track every shipment from customs to the point of use. The Ethiopian Customs Commission will be required to register each Franco-Valuta shipment in the central bank’s new monitoring platform.
According to the directive, any false declaration, diversion of fuel or attempt to bypass the system will trigger administrative and legal penalties.
