When local fuel
pump prices went up by 4.4 percent in April, the second price increase in less
than two months, there was course for alarm. Prices went up from Rwf 1,015 to
Rwf1,060. The Ministry of Trade and Industry attributed the continued hike to
the constant increase in international oil prices over the last two months.
In a move seen to screen Rwandans from external shocks arising from the volatile fuel
market,
Rwanda plans to boost its
oil reserves by constructing an additional 40 million litre storage capacity in
a move to cushion.
The
government has contracted Falcon Oil Limited is to construct the reserves.
The
facility is expected to increase the country’s storage capacity to 60 million
up from the current 20 million litres.
According
to Emmanuel Hategeka , the Permanent Secretary Ministry of Trade and Industry
the government is considering both short and long term measures to reduce fuel
price shocks.
Mr Hategeka
said though mitigation measures have been made possible through streamlining
taxation and logistical issues, the country need to increase storage capacity
for petroleum.
“It is like
hedging such that when fuel prices are up, Rwanda is not heavily affected. We
still have limitations in storage capacity …the way out of this is investing in
fuel storage,” he said.
With the
increased storage capacity, the private sector will be encouraged to consider
bulk purchase schemes, Mr Hategeka said.
Oil
companies are required to keep 10,000 cubic metres of operational stock to
ensure that there is sufficient petroleum supply. Rwanda imports approximately
17 million litres of oil monthly, both for domestic and industrial consumption.
The main
supply route runs from the Mombasa refinery to Nairobi by a 485 kilometre
pipeline and on to Kigali via Uganda by trucks along a 1,250 km road route.
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