Kenya’s new rule on fuel in transit will not hurt Rwanda

Rwanda will continue to have seamless fuel supplies and the prices for the product are likely to remain stable despite a decision by Kenyan Revenue Authority to have imported refined fuel on transit to leave the country within country in 30 days.
Fuel trucks in transit (File photo)
Fuel trucks in transit (File photo)

Rwanda will continue to have seamless fuel supplies and the prices for the product are likely to remain stable despite a decision by Kenyan Revenue Authority to have imported refined fuel on transit to leave the country within country in 30 days.

The order applies to fuel dealers transporting refined fuel to Uganda, DRC, Burundi and Rwanda. Kenya’s customs department says that dealers will be fined if refined fuel in transit fails to leave Kenya Pipeline Company facilities within 30 days, officials have said.  

Robert Opirah, Ag. Coordinator of Petroleum Special Unit in the Ministry of Trade and Industry, said that the charge will affect neither local pump prices nor dealers.

“Tanzanian authorities imposed the same charges but local fuel prices remained stable because we abided by the laws as we advised our dealers to transport their consignment in time,” Opirah said.

The official added that for exceptional cases, where dealers import heavy loads that cannot be transported in time, Rwanda Revenue Authority (RRA) intervenes and asks the correspondent country for extra days. 

Kenyan authorityies said the move aims at decongesting the pipeline system and to improve the use of Kipevu Oil Storage Facility in Mombasa. Kenya is facing stiff competition from Dar-es-salaam in handling transit fuel.

Since 2005, the Kenyan government made it a must for marketers to execute a bond for imported transit petroleum products and ensure the consignment leaves Kenya in 45 days.

By the new law, the outstanding cargo is deemed to be unaccustomed and it is, therefore, subjected to legally provided measures including localisation, if the cargo’s allowed period expires before the entire product is moved.

Victor Uwimana, Chairman of the association of fuel dealers in Rwanda, welcomed the decision by KRA, saying that it will create enough space for dealers and reduce speculation on fuel prices.

Mombasa handles 20 percent of Rwanda’s fuel imports while 80 percent passes through Dar es Salaam.

Uwimana said that the Kenya pipeline has a huge demand, serving a lot of consumers along the way, which makes it difficult for Rwandan dealers to ship in enough supplies.

He added that they had requested RRA to negotiate for 45 days so that dealers can move their cargos.

“It takes two weeks for the trucks to travel to and from Kenya; this is a long journey, where sometimes even trucks breakdown. So the 45 days would be convenient for our business,” he added.

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