Minister of State for National Treasury, Godfrey Kabera, said on Tuesday, on April 1, that as Rwanda embraces hybrid and electric vehicles, the country will still need fuel reserves for industries and the aviation sector. Kabera was responding to concerns by the Parliamentary Committee on Economy and Trade that a proposed levy on petrol and gas oil to triple strategic petroleum reserves could contradict Rwanda’s push for electric vehicles (EVs). ALSO READ: Rwanda on course to grow electric mobility market The government targets to increase petroleum reserve storage capacity from the current 110 million litres—enough to last for about two months in case of supply disruption—to at least 320 million litres. While reviewing the draft law on petroleum products, which proposes a levy to help triple the country’s fuel depot capacity, lawmakers questioned whether the initiative might not undermine efforts to promote electric mobility. ALSO READ: Rwanda moves to triple fuel depot capacity “The more the EV strategy is promoted in the country, the more we should be reducing petrol and diesel-powered cars. Increasing petroleum reserves capacity goes against this objective,” MP Jean Claude Mazimpaka said. MP Deogratias Bizimana Minani argued that the draft law not only contradicts the EV strategy but could also drive up market prices, given that diesel costs are expected to rise by 20 per cent. “For instance, if diesel currently costs Rwf1,647 per liter, and the draft law proposes an additional Rwf329.4 per liter, some traders may be forced to increase the prices of their goods,” he explained. ALSO READ: With new payment system, commuters in Kigali may spend less on public transport The Minister defended the new bill, saying petroleum products will be needed, even in increasing quantities. “We still need fuel stocks. By strategic petroleum reserves, we mean ensuring the availability of fuel for individuals, industries, and businesses,” Kabera said. “We must also consider the upcoming international airport in Bugesera, which will accommodate a big number of airplanes requiring these reserves. Technically, the aviation industry is among those sectors that will continue relying on petroleum reserves,” he stated. ALSO READ: Electric vehicle dealers welcome Rwanda’s Rwf1.2bn carbon market project Kabera said that, aside from existing fuel-powered vehicles, the expansion aims to meet the growing demand for fuel in the country, ensuring reserves can last up to six months. More than 95 per cent of 330,000 vehicles registered in Rwanda as of 2023 were fuel-powered. According to statistics from the Rwanda Revenue Authority (RRA), the number of electric cars increased from 19 in 2020 to 512 in 2024, while hybrid vehicles surged from 28 in 2021 to 6,660 in 2024. The Minister emphasized that considerations were made during the preparation of the draft law to prevent significant impacts the proposed levy could have on market prices. “We analyzed how much fuel a truck transporting potatoes can consume and determined that the additional cost would not exceed Rwf5 per kilogramme. The same analysis was applied to essential commodities like maize and Irish potatoes,” Kabera explained. MP Joseph Ndereremungu suggested that the draft law should be flexible enough to accommodate amendments in case challenges arise. In response, Minister Kabera assured lawmakers that since the levy is calculated as a percentage, its impact will adjust in line with fuel price fluctuations. ALSO READ: Govt, private sector partner to boost country’s oil reserves “At that time, we used about 600,000 liters per day, so the reserve could last six months. However, due to the growth in the number of vehicles and factories, we now use at least two million liters daily, meaning the reserve can only last about two months,” he said.
