A Kenya Pipeline Corporation depot in Nairobi. Rwanda’s planned
strategic fuel reserves to cushion the country against supply shocks
will cost $84 million. PHOTO | FILE
By KABONA ESIARA
In Summary
- Rwanda’s planned strategic fuel reserves to cushion the country against supply shocks will cost $84 million.
- Expanding the fuel reserve capacity comes ahead of the 2017 Kenyan election, which local analysts fear could affect the flow of goods on the Northern Corridor.
- Rwanda is also emerging as re-exporter of petroleum products to the neighbouring Democratic Republic of Congo and Burundi and serves the growing number of airlines that refuel at Kigali International Airport.
Rwanda’s planned strategic fuel reserves to cushion the country against supply shocks will cost $84 million.
Although a strategic investor is yet to be found, the planned
investment is set to increase the country’s fuel storage capacity from
the current 74 million litres to 150 million litres by 2018. This will
place Rwanda ahead of its peers in the region.
Expanding the fuel reserve capacity comes ahead of the 2017
Kenyan election, which local analysts fear could affect the flow of
goods on the Northern Corridor.
The 2007 post-elections violence in Kenya disrupted imports
including fuel and petroleum products to East Africa’s landlocked
countries.
However, Robert Opirah, director-general for trade, and industry
in the Ministry of Trade said Rwanda now imports less fuel through
Mombasa and any supply disruption along the route will have less impact.
Mr Opirah noted that 80 per cent of the country’s fuel is
imported through Dar es Salaam port. The country’s annual fuel demand is
growing at 10.1 per cent and currently 230 million litres of fuel is
consumed with heavy fuel generated power galloping the biggest
percentage of imported fuel.
Rwanda generates 40 per cent of its electricity to power
households and run industries by running heavy fuel generators. And any
disruption in supply could cripple the manufacturing sector.
Rwanda Trade and Industry Minister Francois Kanimaba said the
reserves will reduce the growing pressure on the storage facilities in
the country and also boost the country’s fuel re-exports.
Fuel demand at Kigali airport
Rwanda is also emerging as re-exporter of petroleum products to
the neighbouring Democratic Republic of Congo and Burundi and serves the
growing number of airlines that refuel at Kigali International Airport.
Despite the growing demand for fuel in the country and the
downstream market attracting many players, the country has not built new
fuel storage facilities.
As a result, there are routine delays in delivering fuel and
picking up stock at the facilities at Gasata and Kabuye, which increases
the costs of doing business in Rwanda.
The reserves leased by the Rwandan government to Kenya’s
KenolKobil and Engen have a joint capacity to store 30 million litres of
petrol.
Private players, including Oilcom from Tanzania, are
constructing a 20 million litre storage depot that will be leased to the
growing number of oil marketers
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