Why Rwanda needs enough fuel stock

Dear Editor, The other day government announced that the cost of Liquid Petroleum Gas (LPG) used for cooking and lighting would be made more affordable.

Dear Editor,

The other day government announced that the cost of Liquid Petroleum Gas (LPG) used for cooking and lighting would be made more affordable.

And on Saturday, the government also announced that it would up its fuel strategic reserves form the current the 1.3 million cubic litres to 12 million cubic litres.

The move is to cushion the country against any supply shocks. This plan comes when there is a deepening petroleum shortage in the East African region resulting into queues forming at fuel retail outlets as fuel costs double in other countries.

The shortage started during Christmas described by transport experts as ‘a heavy driving period’. During the festive season more fuel is needed for motorist to drive upcountry to celebrate both the Christmas and New Year.

Some circles say the shortages at the pumps were triggered by a stop in the supply chain—from the refinery to the market. The pipeline from Mombasa to Nairobi is currently being worked on to increase its capacity by 50 percent, a move that will alleviate the supply problem.

Kenya media however reports that the stop in supply is at times caused by power fluctuations and outages that interfere with the ability of the refinery to meet production targets.

Therefore realising that leaving oil importation and storage in the hands of dealers would be risking the country, the Government of Rwanda has decided to stock more fuel and promises to source it at Mombasa Port.

Government fears that petroleum product dealers can do any thing to stop the supply. When the fuel supply chain is interrupted, fuel prices usually hike, transport fares follow suit and costs of food and basic consumer goods shoot up.

Of course with escalating costs, investors may not pump their money into such an economy. Therefore the move to have enough fuel reserve makes Rwanda a more attractive country to invest and do business.

Monique Nsanzabaganwa, the Commerce Minister revealed that government is negotiating with neighbouring countries to allow local firms to access fuel right from the source at the east African coast. This makes the oil dealers more accountable to the country.

Speculation is rife that that the recent fuel shortage was man-made and created because some people were out to make a quick buck. Why? When put to task to account for the shortages, the Kenya Pipeline management said they were pumping fuel according to the orders they receive.

This therefore means oil companies with investments in Kenya, Uganda, Burundi, Rwanda and Tanzania were not ordering enough fuel to cause an artificial shortage in the market during the festive season in order to make more money.

Therefore Rwanda Government is going to cushion the country against any shocks caused by fuel shortages.

Mbarara

 

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