Rwandan motorists will have to wait much longer for a drop in fuel pump prices despite a general slump in global oil prices.
The current fuel prices in Rwanda are Rwf 875/Litre ($1.17). However, a barrel of oil at international market is $28.84, the lowest since the last 13 years.
In July 2015, pump prices dropped from Rwf 935/Litre to Rwf874/litre when a barrel was selling at $ 50.94.
The public wants the pump prices to be adjusted to the changes, unfortunately this will not happen immediately.
“We cannot respond to every change on international market right away. We adjust prices every two months,” says Trade Minister Francois Kanimba. “Traders who imported oil products today may only ship their provisions in the next two months.”
Kanimba said, even then, the decrease may not be so significant, because changes on the global market affect local prices by only 34%, thanks to other constant factors.
For example the barrel price has been changing mainly due to dollar fluctuations, but transport itinerary and costs remain relatively constant.
Rwandans access their oil products mainly through the Northern corridor itinerary at Mombasa port in Kenya, a 1490.8 km away from Kigali.
The country has since 2015 introduced a new levy of Rwf 32, 72 per litter on maintaining strategic fuel reserves.
Meanwhile, Emmanuel Hategeka, the Permanent Secretary in the ministry of trade told KT Press that Rwanda is looking for oil reserves that can serve the country for at least three months in case there is a crisis.
Rwandan reserves have an estimated storage capacity of 23 million cubic meters of oil currently.
More storage facilities are also being built in Kigali and Eastern Province. Every trader will soon have a reserve of at least one month. Traders also pay a road maintenance levy which increased to Rwf 80.37 in 2015 from Rwf 60.37 in 2009.
“The increase on road maintenance levy is attributed to rise in cost of construction materials,” says Hategeka.
In 2003, the average price per barrel was $ 28.1, but the price increased drastically, reaching $ 109.45 in 2012 which was the highest ever in the last five decades, according to Statistics from a website that provides several trading data.
From 2013 the price per barrel started decreasing from $ 105.87 to $50.95 in 2015. The price of a barrel was $ 28.84 as of January 19.
Rwanda hopes that the price of a barrel will not increase soon, “because supply is higher than demand” according to Hategeka.