•The government is currently in the process of reducing its taxation subsidy on fuel which is currently 40 percent of import duty.

As government plans to change the fuel taxing system, there will be no immediate impact on the pump price as the adjustment will be gradual, a senior official in the Ministry of Finance and Economic Planning (MINICOFIN) has said.

The government is currently in the process of reducing its taxation subsidy on fuel which is currently 40 percent of import duty. 
"This adjustment will be made gradually to ensure that the Rwandan citizens are not hit suddenly by increased prices.

We are mindful of any sharp negative shock prices,” Kampeta Sayinzoga, the Director of Macro-economic Policy Unit at MINICOFIN told Business Times.

While the adjustments are essential for Rwanda as a member of the EAC, Sayinzoga allayed fears that new tax regime will bring in unstable regime.

Rwanda has enjoyed relatively stable fuel prices that are much lower as compared to those in the region.

Sayinzoga also noted that for companies dealing in fuel with the new tax policy, their will be a fixed tax for each litre of fuel as opposed to taxing them based on the "value” of the fuel.

"It means that the pump price will absorb more directly changes in international fuel prices. This makes taxation more predictable for a company which is a positive thing,” she said.

The planned move is to allow alignment to other practices to the East African Community (EAC) countries.

Recently, fuel prices across the country increased from  Rwf795 to Rwf 825 per litre for either diesel or petrol.

Though this has been attributed to the rise of oil prices on the international market. Just of recent, global oil prices have been reported to rally above $67 (Rwf36, 224) per barrel for the first time since November 2008.

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