Why East Africa Fuel Crisis Will Linger After Iran War Ceasefire

Why It Matters

The prolonged shortage threatens inflation, transport costs and economic stability across East Africa, forcing governments to spend heavily on subsidies or risk social unrest.

Key Takeaways

• East African reserves deplete by mid‑May, fueling rationing risk
• Fuel prices jumped over 30% in Tanzania, hitting $1.53 per litre
• DRC spent $288 million in 2023 subsidies, cut to $31 million in 2024
• New shipments delayed three weeks after ceasefire, keeping prices elevated

Pulse Analysis

The East African fuel crunch stems from the Gulf conflict that began in February. U.S. and Israeli strikes on Iran and Tehran’s retaliation have restricted traffic through the Strait of Hormuz, the main conduit for refined products shipped to Kenya, Tanzania, Uganda and nearby states. Over 90% of their gasoline, diesel and kerosene come from the UAE, Qatar, Saudi Arabia and Bahrain, making the region highly exposed to maritime disruptions. The recent two‑week ceasefire will not instantly restore shipments; tankers must reroute and clear customs, adding weeks to delivery.

Governments have responded with price caps, subsidies and austerity measures. Tanzania’s regulator Ewura lifted retail fuel by more than 30%, to Tsh 3,820 (≈$1.53) per litre, while President Samia Suluhu Hassan ordered senior officials to travel together on a single bus. The DRC spent $288 million on subsidies in 2023, dropping to $31 million in 2024 after fraud probes, yet still keeps pump prices near $1.05 per litre. Rwanda, reliant on Mombasa and Dar es‑Salaam ports, raised petrol by 16% and diesel by 13% to offset import‑cost spikes.

The supply lag means East African markets will likely face high prices for another month, with reserves expected to run out by mid‑May. Higher transport costs could ripple through food and manufacturing supply chains, pressuring fiscal budgets and sparking social discontent. Policymakers may need to diversify import sources, build strategic petroleum reserves, or accelerate alternative energy projects to mitigate future shocks. Without such structural changes, the region remains vulnerable to external geopolitical events and volatile global oil prices.