The Minister of Infrastructure, Dr. Nsabimana, appearing on Rwanda Television, said that the government has continued to put in subsidies in the fuel industry.
The Government of Rwanda has announced new fuel prices reflecting a sharp hike on pump prices, a development which has been attributed to the global fuel crisis triggered by the Covid-19 pandemic and exacerbated by the Russia-Ukraine war.
Announcing the new pump prices after two months, the Minister of Infrastructure, Dr. Ernest Nsabimana, said that hike could have been worse had the government not put in a subsidy as it has done, since the Covid-19 outbreak.
The price of petrol (premium) increased from Rwf1, 359 to Rwf1,460 while the price of diesel jumped from Rwf1,368 to Rwf1,503, reflecting an increase of Rwf135 on diesel or an increase of 9.9 percent and Rwf101, or 7.4 percent on petrol. The new prices take effect from Friday, June 10, according to a statement by Rwanda Utilities Regulatory Authority (RURA).
Dr. Nsabimana said that the price hike is a direct result of the conflict between Russia and Ukraine, which led to European countries looking for alternative sources of petroleum products.
“This means that European countries which previously depended on gas from Ukraine and Russia have now shifted to the Middle East where we normally get our fuel from. There is a huge demand of petroleum products,”
“The situation in Russia and Ukraine came just when industries that were grounded by the pandemic were picking up and resuming operations, which also increased the demand for fuel,” Dr. Nsabimana explained.
Dr. Nsabimana said that since May 2021, prices have been stabilised as a result of the decision by the Govern1nent of Rwanda to forego some taxes on imports of select petroleum products to ensure that citizens don’t feel the pinch.
Minister Nsabimana said that specifically for this period, the Government of Rwanda has maintained price increases of 101Rwf/L, for Gasoline and 135Rwf/L for Diesel, instead of 316Rwf/L, and 350Rwf/L, respectively, which would have been the actual increase had the government not put in a subsidy.
In a statement, the regulator reiterated what the Minister said, that the price hike would have been higher had the government not subsidised.
“The decision was taken to mitigate the adverse impact of high fuel prices on general price increases (inflation), which would negatively affect the speed of Rwanda’s economic recovery front tl1e COVID- 19 pandemic.”
The Minister of Local Government, Jean Marie Vianney Gatabazi, urged the citizens to remain calm because the Government will ensure that there is no unjustified hike in commodity prices. Gatabazi said that the issue of fuel price hike should not be seen in the Rwandan context alone because it is affecting all countries around the world.
“The government has offered to pay the extra cost for a citizen and sacrificed taxes to ensure that the citizens don’t feel the pinch. The whole idea of the government absorbing this cost, which otherwise would be transferred to the consumer and forgoing billions in taxes.
Minister Gatabazi urged citizens not to panic.
