Rwanda Plans to Boost Petroleum Storage Capacity

Rwanda Plans to Boost Petroleum Storage Capacity

Rwanda is planning to boost its oil reserves by constructing an additional 40 million litre storage capacity in a move to cushion customers from external shocks arising from the volatile fuel market.

Falcon Oil Limited is the company contracted to construct the reserves.
Like its fellow East African Community member countries, Rwanda imports all its oil, used for a wide range of economic activities, notably transport, electricity generation, industry, cooking and lighting among others.

The facility is expected to increase the country’s storage capacity to 60 million up from the current 20 million litres.

According to Emmanuel Hategeka , the Permanent Secretary Ministry of Trade and Industry the government is considering both short and long term measures to reduce fuel price shocks.

Mr Hategeka said though mitigation measures have been made possible through streamlining taxation and logistical issues, the country need to increase storage capacity for petroleum.

“It is like hedging such that when fuel prices are up, Rwanda is not heavily affected. We still have limitations in storage capacity …the way out of this is investing in fuel storage,” he said.

With the increased storage capacity, the private sector will be encouraged to consider bulk purchase schemes, Mr Hategeka said.

Oil companies are required to keep 10,000 cubic metres of operational stock to ensure that there is sufficient petroleum supply. Rwanda imports approximately 17 million litres of oil monthly, both for domestic and industrial consumption.

The main supply route runs from the Mombasa refinery to Nairobi by a 485 kilometre pipeline and on to Kigali via Uganda by trucks along a 1,250 km road route.

Currently distribution and marketing of fuel products is dominated by Enterprise Rwandaise de Petrole, ERP and Shell.