Ethiopia Grants Tax Exemption for Natural Gas Vehicles to Promote Local Energy Use

Addis Ababa, October 10, 2025 (ENA) -- The government of Ethiopia has announced tax exemptions on all types of dry and liquid cargo vehicles, as well as public transport vehicles powered entirely by natural gas.  

This move is part of a broader government strategy to promote the use of locally sourced natural gas and reduce dependence on imported petroleum products.

Despite having significant reserves of natural gas, Ethiopia has long remained unable to benefit meaningfully from this natural resource. However, recent developments indicate that the government's persistent efforts to change this reality are beginning to bear fruit.

A new natural gas processing facility has officially commenced operations in the Callub area, enabling the country to utilize its domestic gas resources. With production underway, the government aims to supply the local market and encourage a transition from petrol and diesel-powered vehicles to those running on natural gas.

The Ministry highlighted several benefits of natural gas: it emits significantly less carbon into the atmosphere, is highly efficient for energy use, and can serve a variety of power-related applications. Using locally produced natural gas also presents a key economic advantage by reducing the country’s expenditure on foreign currency for fuel imports.

To support this energy transition, the government has introduced new regulations that allow the duty-free import of any public transport or cargo vehicles—whether for dry or liquid goods—that run exclusively on natural gas.

This initiative forms part of Ethiopia's broader efforts to strengthen energy security, promote environmental sustainability, and support the logistics and transport sectors by transitioning to cleaner, more cost-effective fuels.

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