Historically, the Ethiopian government strictly regulated public transport fares to ensure affordability. However, by late 2021, severe pressure from the international oil market forced localized retail fuel price hikes.

In October 2021, the Ethiopian government implemented a major policy shift by removing fuel subsidies. This caused the price of fuel to rise significantly (nearly doubling in some cases). To compensate transport owners for the increased operational costs and to prevent transport strikes, the Authority revised the tariff structure.

The update was part of Ethiopia's ten-year economic development plan and aimed to better align the country’s tariff system with international standards from the World Customs Organization (WCO). The Ethiopian Ministry of Finance, which prepared the new tariff book in collaboration with the Ministry of Trade and Industry and the Customs Commission, noted that the revisions were designed to encourage the growth of the manufacturing sector and promote import substitution.

: Fares were increased by 10 cents per kilometer , shifting the benchmark baseline rate to 1 Birr per kilometer (up from 90 cents).

Because the federal government transitioned more autonomy to regional transport bureaus, discrepancies emerged between interstate transit rates and localized city tariffs. Long-distance transport tariffs linking Addis Ababa to regions like Oromia, Amhara, and SNNPR required separate joint approvals, leading to temporary service disruptions at regional borders. 5. Strategic Long-Term Implications of the 2021 Tariffs