Another notable change is the unusually frequent revision of fuel prices. For the first time, prices were adjusted after only two weeks. Traditionally, fuel prices in Rwanda were revised every two months, but in early April, the cycle was shortened to one month, and later to just two weeks.
According to RURA’s pricing mechanism, fuel prices can technically be reviewed daily depending on market conditions and their impact on supply and costs.
Global supply disruptions as the main driver
Petrol imported into Rwanda passes through ports in Dar es Salaam (Tanzania) and Mombasa (Kenya). However, before reaching these ports, it is sourced from various global suppliers.
Currently, about 27% of fuel entering the region passes through the Strait of Hormuz. Other supplies come from India and Saudi Arabia, often transported through routes near Yemen, particularly the Bab el-Mandeb Strait.
Due to the Iran–US conflict, tensions in the Strait of Hormuz have disrupted shipping routes, with some vessels being blocked or delayed.
This has reduced the flow of fuel to Tanzania and Kenya, forcing suppliers to seek alternative and often more expensive routes. As a result, transportation costs have increased, which has directly pushed up fuel prices.
In Kenya and Tanzania, fuel prices are also adjusted monthly. Currently, petrol in Kenya costs about Rwf 2,342 per litre, while diesel is around Rwf 2,341.
Before Rwanda adjusted its prices, fuel in the country was relatively cheaper compared to neighbouring markets. This allowed some international truck drivers to refuel in Rwanda.
However, this situation created distortions in the market, prompting a price adjustment to align Rwanda with regional pricing trends, where profit margins had shifted unfavourably.
Storage owners have significantly increased prices
In Rwanda, fuel pricing is calculated based on importers who bring petroleum products through international supply chains, mainly via shipping routes in the region. These importers account for about 60% of Rwanda’s fuel supply.
The remaining 40% is supplied through traders who purchase fuel from Tanzania and Kenya, negotiate prices, transport it by trucks, and sell it in Rwanda. Due to rising global prices and regional shortages, these traders face higher procurement costs.
In simple terms, storage owners tend to delay selling in anticipation of higher future profits. Some storage operators in Tanzania have sharply increased their prices, which has affected the 40% of traders who rely on them. As a result, many truckers are now unable to sell fuel competitively in the Rwandan market.
If this segment of 40% were left unregulated, the 60% of formal importers would continue supplying fuel, but at a level insufficient to meet national demand, potentially leading to shortages.
This situation forced Rwanda to take early action to stabilise the market and ensure continued supply. Typically, a fuel truck takes at least five days to travel from Tanzania to Rwanda.
Government absorbs diesel cost increases
According to RURA’s latest pricing statement, the price of diesel has remained unchanged. This decision was made to continue supporting public transport, goods transportation, and the broader economy.
This is a critical intervention, as an increase in diesel prices would have significantly raised the cost of living across all sectors. Transport fares would have increased, and the prices of goods would have risen sharply.
In practical terms, maintaining diesel prices means the government is effectively absorbing part of the cost, likely through tax adjustments. Without this intervention, diesel prices could have exceeded Rwf 3,000 per litre.
Future outlook
If current trends continue, petrol prices in Rwanda could exceed Rwf 3,200 per litre by May, reflecting ongoing global market pressures.
On the international market, a barrel of crude oil is currently trading between $98.5 and $113 in some regions.
In March, crude oil prices fluctuated significantly: on March 4 it stood at $74.6 per barrel, rose to $97 on March 19, reached $98.7 on March 13, and climbed to about $108 in early April.
These global fluctuations continue to strongly influence fuel prices in Rwanda and the wider region.
Leave a Reply