Fuel price policies in Africa
South Africa
South Africa has regulated fuel prices that are set by the government on a monthly basis. The level of prices is based on a formula that takes into account oil prices, the USD exchange rate, and various other smaller metrics, such as margins along the supply chain. The result is a system in which fuel prices track developments in the oil market very closely. In fact, the behavior of prices is similar to what we observe in liberalized markets, with the exception that prices change monthly and not daily.
Algeria
Algeria sits at the opposite pole from South Africa, with very infrequent price adjustments, often years apart, despite wide variations in oil prices. Similar to many other oil-rich countries, low-cost fuel is considered a social entitlement, and prices are maintained at low and stable levels.
Egypt
Egypt administers fuel prices through discrete government-set steps, adjusting infrequently but consistently upward. The goal is to reduce the fiscal burden of subsidizing fuel, but the country still has some way to go. Both gasoline and diesel prices remain very low by international standards. Although they have increased considerably in local currency terms, the depreciation of the Egyptian pound over time has left them at low levels when expressed in dollars. Responsiveness to oil prices is very limited.
Nigeria
Nigeria had largely fixed fuel prices until the start of the war in Ukraine. Then, when oil prices rose sharply, that policy became unsustainable and fuel prices were allowed to rise. Diesel prices rose dramatically first, followed by gasoline prices. In the years that followed, the depreciating local currency contributed to continuously rising prices. Although Nigeria is an oil exporter, its refineries have to buy oil at international prices, which are denominated in U.S. dollars. Hence, an appreciating dollar means more expensive oil. Then, in 2025, a massive new refinery opened, providing competition in the fuel market. Fuel prices declined sharply. Since then, fuel prices have tracked international oil prices more or less, though not without occasional government intervention.
Kenya
Kenya sits in a pragmatic middle ground. Fuel prices are set by the government but adjust regularly and track both Brent and the shilling-dollar exchange rate, with enough regulatory smoothing to produce stickier adjustments than a fully liberalized market would deliver. Prices are published on a monthly basis and vary across different regions of the country. As in many other countries, fuel prices are probably the most important prices from an economic, social, and political perspective. Sharp upward adjustments, such as the one that occurred after the start of the Iran war in March 2026, bring people to the streets and put political pressure on the government to reduce pass-through. This contributes to incomplete pass-through during oil price shocks.
Ethiopia
Ethiopia's story is one of managed subsidy under growing strain, following a recurring pattern: prices are frozen, fiscal pressure builds, sharp corrective adjustment follows, and prices are then frozen again. The cycle accelerated sharply through 2022 as Brent surged, with diesel nearly tripling in under two years. The most dramatic moment came not from the oil market but from a 2024 IMF-linked currency devaluation that halved the birr's value in a single month. Despite the devaluation, pump prices barely moved, as the government absorbed the entire shock. Subsequent adjustments have been larger and more frequent, suggesting a genuine, if halting, shift toward greater market pass-through.
Morocco
The fuel market in Morocco has been liberalized since 2015, with a number of gas station chains present in the market and setting prices (mostly) freely. As such, fuel prices follow oil prices and exchange rate developments. The pattern, however, is one of less frequent price changes compared with, say, Europe and the U.S. Instead of changing daily, prices are adjusted every couple of weeks or so. It also seems that there is some pressure from the government on market leaders to rein in large price spikes. Because of market concentration, this pressure then permeates across the entire market.
Other countries
The remaining countries largely confirm the patterns above. The West African CFA franc zone (including Senegal, Ivory Coast, Cameroon, Burkina Faso, Mali, and Togo) operates a shared administered pricing framework that is relatively more insulated from currency risk by the euro peg, producing patterns similar to Algeria's, though less extreme. Eastern and southern Africa, including Tanzania, Uganda, Namibia, Zambia, and Botswana, shows more frequent price adjustment and greater market linkage, though persistent currency depreciation makes fuel price inflation a structural rather than cyclical problem. There are also extremes, such as Libya, where prices are exceptionally low and almost never change, and Zimbabwe, where hyperinflation and repeated currency resets have a greater impact on prices than the standard drivers: oil prices and exchange rates. Island economies such as Mauritius, Cape Verde, and Seychelles behave more like liberalized markets, with their import dependence and institutional stability pulling them toward regular, market-responsive pricing.
Further resources
The latest prices in Africa are available here:
- gasoline prices
- diesel prices
Analytical measures of fuel prices policies in the countries that we track:
- fuel price regulations
Forecast of diesel prices in Africa and elsewhere:
- forecast
Fuel policies in other regions:
- Fuel price polices in Asia
- Fuel price polices in Latin America
A bit dated paper from the World Bank but still valid, including for Africa:
- Political determinants of fuel prices
