Addis Ababa, October 30, 2026 (FMC) – Ethiopian Prime Minister Abiy Ahmed has outlined a broader national strategy to turn the country’s natural gas resources into an engine of industrial growth, lower production and transportation costs, and ease the cost-of-living pressures facing citizens.
Speaking following the commissioning of the first natural gas-powered city buses in Addis Ababa, the Prime Minister explained how Ethiopia is working to extend the benefits of domestic gas production beyond public transportation to manufacturing, construction, logistics and other sectors of the economy.
He emphasized that producing natural gas is only the beginning, stressing that its real value lies in establishing the infrastructure and technical capacity needed to deliver it to consumers, industries and businesses.
Abiy recalled the commencement of the first phase of natural gas production in the Ogaden area of the Somali Region, noting that the Ethiopian Government had since undertaken substantial work to make the resource accessible to end users.
This has involved developing specialized storage facilities, establishing gas refueling stations and arranging dedicated transportation systems. Unlike conventional liquid-fuel distribution, natural gas requires specific infrastructure and equipment for storage, handling and delivery.
The government has established refueling facilities in Addis Ababa, Adama and Dire Dawa, while also working to secure the specialized vehicles required to transport gas from production sites to distribution points and industrial users.
The Prime Minister explained that introducing natural gas into the public transport system also required overcoming technical challenges.
Existing Addis Ababa city buses, which had previously operated on conventional fuels, needed to be retrofitted to use gas, a process that required specialized knowledge and technical experience that had been limited locally.
Although the conversion of the existing buses is continuing, the government decided not to delay the expansion of the programme while waiting for the gradual retrofitting process to cover a larger fleet.
Accordingly, Ethiopia has ordered 400 new natural gas-powered buses, which Abiy said are expected to arrive within approximately three months. He noted that the additional buses would represent around 30 percent of the current Addis Ababa Anbessa City Bus fleet.
The government will continue converting existing buses while preparing to introduce the newly ordered vehicles, with the longer-term objective of progressively transitioning the city’s fuel-powered public buses to natural gas.
Abiy also pointed to the wider economic implications of the transition, explaining that natural gas-powered transport can substantially reduce operating expenses compared with conventional fuel systems.
According to him, the resulting savings can help lower passenger transportation costs, providing relief particularly to low-income households and people who depend on public transport for their daily activities.
He identified food, housing and transportation as three major areas placing pressure on household budgets, arguing that reducing expenses in these sectors is essential to improving citizens’ living conditions.
The Prime Minister said the benefits of natural gas should therefore be measured not only by production figures or the completion of energy projects, but also by the extent to which the resource helps reduce costs and improves people’s everyday lives.
Beyond transportation, Ethiopia is working to expand the use of natural gas in manufacturing, where it can reduce dependence on imported production inputs and strengthen the competitiveness of domestic industries.
PM Abiy cited ceramic factories in Mojo and Debre Berhan, which have transitioned from conventional imported fuels to locally produced natural gas. According to the Prime Minister, the production capacity of the two factories exceeds the country’s domestic demand for ceramic products.
He explained that using locally available gas would help these industries reduce production expenses, improve efficiency and make their products more affordable to consumers.
The transition also has implications for the construction sector, where the cost of building materials is influenced by both manufacturing and transportation expenses.
The Prime Minister disclosed that Ethiopia had ordered nearly 100 specialized gas tanker trucks, expected to arrive within two to three months. Their deployment would help facilitate the distribution of natural gas to factories and construction-related facilities, reducing the cost of transporting energy and supporting lower production and delivery expenses.
Abiy said these interventions could contribute to reducing the overall cost of construction materials and, consequently, help ease housing and construction costs.
He further noted that more affordable transportation and distribution systems could benefit the movement of agricultural products from rural areas to urban markets. Lower logistics expenses would help improve the supply chain, reduce transportation-related costs and contribute to easing inflationary pressures.
The government is also working to extend natural gas use to the taxi sector. Abiy said an initiative to convert taxis to gas-powered systems has begun, adding that expanding the programme could reduce operating costs for taxi operators and bring wider benefits to urban transportation.
He also identified electricity generation and fertilizer production as important areas in which natural gas could support Ethiopia’s broader development ambitions as production and infrastructure expand.
The Prime Minister stressed that the country’s objective is to make greater use of domestic resources across the economy, reducing reliance on imported fuel and other external inputs while strengthening local production capacity.
He said the government is pursuing a development approach that connects domestic resource production with tangible economic outcomes, including improved food production, more affordable transportation and lower costs for locally manufactured goods.
Abiy underscored that the success of such initiatives depends on the government’s ability to move beyond announcing projects and ensure that they are completed and deliver practical benefits.
He said Ethiopia must continue accelerating implementation because public needs remain extensive and the development process requires sustained effort, technical expertise, financial resources and cooperation.
The Prime Minister also highlighted the importance of building domestic knowledge and technological capacity to manage complex energy infrastructure and expand its applications across different sectors.
While describing the current progress as an important beginning, he emphasized that much remains to be done, particularly given the country’s substantial demand for buses, taxis, industrial energy and other services.
He called for continued public participation and cooperation in national development efforts, expressing confidence in Ethiopia’s development prospects and stressing that economic progress must ultimately improve the lives of citizens.
Abiy said the country’s development ambitions must advance alongside peace, security and effective institutions, noting that development has limited meaning if its benefits do not reach ordinary people.
He reiterated that Ethiopia’s natural gas resources present an opportunity to strengthen domestic production, reduce costs across interconnected economic sectors and improve the livelihoods of citizens, provided that the country continues building the infrastructure and capacity required to translate its resources into practical results.