Government will stock its fuel reserves in an effort to ensure stable fuel prices on the local market following the announcement by Kenya Petroleum Refineries Limited (KPRL) on plans to raise charges for processing crude oil.
Starting January next year KPRL plans to adjust crude oil rates from $0.95 or Rwf555.7 to $1.35 or Rwf789.7 per barrel. Kenya accounts for more than 20 percent of Rwanda’s fuel supplies.
The Minister of Trade and Industry, Monique Nsanzabaganwa, told Business Times that the country has allotted itself a three-month period within which to make adjustments in relation to KPRL new rates.
“So we will be buying in bulk to stabilise the local price,” she added.
The Minister stated that she could not guarantee that local pump prices will not change, adding that efforts were in place to stabilise prices by stocking enough fuel before next year.
KPRL also plans to adjust loading fees on April 1, next year from $4.50 (Rwf2,601) to $6 (Rwf3,468).
Officials at the refinery say an adjustment of the fees is necessary to enable it to cover its operational expenses; and build the financial muscle it requires to repair the aged segments of its plant that have contributed to perennial petrol and gas shortages.
“We always adjust local pump prices accordingly after agreeing with dealers; right now we are building a massive storage facility which will also help to stabilise prices in cases of a price surge in the region or on the international market,” Nsanzabaganwa said.
Late last month, Kenya experienced a fuel shortage that affected neighbouring countries like Uganda where fuel prices almost doubled.
The crisis was attributed to a dispute between market leader in Kenya, KenolKobil, and the industry regulator, the Energy Regulatory Commission (ERC). It allegedly came about when KenolKobil’s crude import licence was withdrawn by the Kenyan government early last month.
Despite the slump in local prices last month due to the crisis, pump prices in most stations in neighbouring Uganda and Kenya shot up, while other filling stations closed down due to lack of fuel.