· Birr Metrics · Amanuel Kindeya
Fuel Scarcity Grounds Ethiopia’s Once-Booming Construction Sector
Topics:ConstructionEconomy
Summary of the Birr Metrics report
A fuel shortage linked to shipping disruption around the Strait of Hormuz has slowed or stopped construction sites across Ethiopia. Official diesel prices rose about 16.6 percent in three weeks. Contractors report idle machines and halted projects, while cement neared 1,000 birr a quintal and steel and finishing materials rose more than 50 percent in a month.
Key points
- The official price of white diesel rose from 139.84 birr a litre on March 11 to 163.09 birr on April 1.
- Retail cement climbed close to 1,000 birr a quintal, and steel and finishing materials rose by more than 50 percent within a month.
- Contractors, including Azonal Construction, report halted projects because of fuel shortages.
- The head of the contractors' association proposes temporary state control of fuel stations and a digital distribution system.
Real.et analysis
Birr Metrics reports that a nationwide fuel shortage has forced construction projects to slow down or stop. The report links the shortage to shipping disruption around the Strait of Hormuz. The official price of white diesel rose from 139.84 birr a litre on March 11 to 163.09 birr on April 1, about 16.6 percent in three weeks. Contractors say prices on the informal market are far higher.
Material prices moved with fuel. The report says retail cement climbed close to 1,000 birr a quintal. Steel and other items, finishing materials included, rose by more than 50 percent within a month. Cement, sand and aggregates react first because trucks carry them over long distances.
Contractors describe halted sites. The owner of Azonal Construction says the firm stopped several projects. A project manager at Bamaco Construction says machines there can use up to 300 litres of diesel a day. Contractors also say fuel allocation favours large state projects and leaves private firms short. Girma Habtemariam, head of the contractors' association, proposes temporary state control of fuel stations and a digital distribution system.
What this means for builders
If you build your own house, fuel now affects both your price and your schedule.
- Ask for delivered prices. The transport share of cement, sand and gravel rises with diesel. Compare prices delivered to your site, not prices at the depot.
- Check the validity of each offer. Suppliers may hold a price for only a few days when the market moves fast.
- Plan for stops. Excavators, mixers and generators need diesel. Ask your contractor how work continues if fuel runs short.
What this means for buyers
Developers face the same costs. A project under construction could run late, and a developer could ask buyers for more money. Read your contract for the delivery date and for any clause on price changes. Our article on a Supreme Court ruling that lets developers reprice explains the risk.
See present prices for cement and rebar on our construction materials pages. Our guide to construction material prices in Ethiopia explains what moves them.