Rwanda's agreement with Kenya to import refined petroleum products through a government-to-government arrangement is expected to strengthen fuel security, lower procurement costs and make the country's petroleum supply chain more resilient, according to industry players and economists. The deal allows the government to procure petroleum products in bulk using Kenya's transport and storage infrastructure, a move stakeholders say will improve fuel procurement, storage and distribution while reducing reliance on intermediaries. ALSO READ: Rwanda, Kenya sign deal for petroleum importation through Northern Corridor Eric Herbez Mutanganda, Chairperson of the Rwanda Association of Petroleum Products Importers (ASSIMPER), said one of the biggest advantages of the agreement is that Rwanda will now purchase petroleum products in bulk through a government-to-government framework. Buying in bulk gives us access to better commercial terms. You get discounts and a more favourable pricing formula than under the previous procurement model, he said. Mutanganda added that petroleum products will now be offloaded and stored at the Kenya Pipeline Company (KPC) before being transported to Rwanda. Our products will be more secure because they will be stored at KPC, which has a capacity of 1.2 billion litres. Rwanda's volumes are relatively small compared to that capacity, he said. The agreement also gives importers greater flexibility, extending the storage period in Kenya from about 30 days to 60 days. This allows importers to bring products into Rwanda when needed while the country continues expanding its own fuel storage infrastructure, he said. ALSO READ: Govt, importers expand fuel reserves as global prices surge Mutanganda said the arrangement also reduces the risks associated with relying on a single transport corridor. Previously, about 90 to 95 per cent of our petroleum products came through one corridor. Now we will use two. If one route is disrupted, we have another option. That will ultimately benefit the local fuel market, he said. Economist John Bosco Kalisa described the agreement as a strategic shift in how Rwanda secures its petroleum supplies, with benefits extending beyond procurement to energy security and supply resilience. He noted that although Rwanda imports general cargo through both the Central Corridor via Tanzania and the Northern Corridor through Kenya and Uganda, petroleum products are better suited to the Northern Corridor because of Kenya's extensive pipeline network. For general cargo, many importers prefer the Central Corridor because it is shorter. But petroleum is different. Kenya has an established pipeline system that transports fuel inland from the Port of Mombasa, making the Northern Corridor a more efficient option, he said. Kalisa said the government-to-government arrangement also removes brokers from the supply chain, lowering transaction costs and improving efficiency. Buying directly through a government-to-government framework reduces costs by eliminating intermediaries, he said. Beyond cost savings, Kalisa said the agreement will enable Rwanda to build larger strategic fuel reserves, strengthening the country's ability to withstand supply disruptions and price shocks. Rwanda's storage capacity has historically been limited, making it more vulnerable to supply disruptions and volatility in global oil markets. Bulk procurement is not only about securing better prices but also about building reserves that can cushion the country against external shocks, he said. He cited recent tensions in the Middle East, which drove up global oil prices, as an example of the importance of maintaining adequate fuel reserves. Countries with sufficient fuel stocks were better able to absorb those shocks because they already had reserves. This arrangement gives Rwanda access to Kenya's larger storage infrastructure while it continues expanding its own capacity, Kalisa said. He added that diversifying transport routes will further strengthen supply reliability. If one corridor experiences disruptions, another remains operational. That flexibility is essential for a strategic commodity like fuel, he said. Kalisa stressed that a stable fuel supply is critical because petroleum underpins almost every sector of the economy, including transport, manufacturing, agriculture and trade. When fuel supplies are disrupted, the impact is felt across the entire economy. Strengthening petroleum security is therefore not just about the energy sector, but also about safeguarding economic activity and livelihoods, he said.
