Rwanda plans to re-export oil

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Oil reserves at Gikondo, a Kigali suburb

Oil reserves at Gikondo, a Kigali suburb

Rwanda looks to focus on oil re-exports as it continues to seek ways that could expand its export earnings and strengthen the country’s foreign exchange reserve position.

According to Robert Opirah, the Ministry of Trade and Industry director general for trade and investment, the government has already called for contractors to bid for the construction of a 150 million-litre capacity fuel reserve facility as it prepares for the venture.

Opirah said the strategic project will besides boosting the country’s fuel reserves, strengthen Rwanda’s capacity to engage in the oil and oil products re-export business, serving neighbouring countries including Burundi and eastern Democratic Republic of Congo.

“We want experienced operators to construct the facility that will hold over 150 million litres of fuel reserves, which is enough to support the re- exports sector,” Opirah, also the in charge of fuel importation at the ministry, said in an exclusive interview with Business Times.

He also revealed that more storage facilities with the capacity to hold 42 million litres would be operational by the end of the year.

“This will boost the country’s current fuel reserve capacity from 30 million litres to over 70 million litres by the end 2015, and more than 200 million litres by 2017,” he noted.

Oil Com and SP new fuel storage facilities, which have a combined capacity of 42 million litres, will also be completed by the end of the year, Opirah added.

He said Oil Com is building reserves in Gatsata that will have a capacity of 20 million litres, while that of SP located in Kabuga will bring on board 22 million litres by the end of the month.

“With the already existing government reserves, the total fuel reserve capacity is projected to reach over 200 million litres in the next five years. This is enough to supply the local market and export the remaining to the neighbouring markets like the eastern DRC and Burundi,” Opirah said.

He said there are also other companies currently constructing oil storage facilities, including Abbarci Petroleum Marketing Company, ORYX Petroleum, PROTEK and Mount Meru Petroleum.

Rwanda’s re-exports increased by 47.4 per cent in value during the first half of the year, and were dominated by petroleum products and vehicles.

These products were mainly jet fuel sold to airlines refueling at the Kigali International Airport and other petroleum products re-exported to eastern DRC and Burundi.

Last year, government and the private sector teamed up to construct extra fuel reserves across the country at an estimated cost of over $30 million (about Rwf21.2 billion).

These initiatives are geared at cushioning the country in case of instabilities in fuel prices on the global market, fuel importers said.

Victor Nduwumwami, the president of the Rwanda Fuel Importers Association, said catering for the growing fuel demand in the country is the only way to keep the economy on track.

“The economy is growing and so is the demand for fuel and its products; and one way to satisfy this demand is by ensuring you have enough volumes all the time.

“Constructing more fuel reserves will also help us counter price instabilities given the kind of precarious situation in the Middle East, which is the main source of our oil supplies,” Nduwumwami said.

According to statistics, demand for petroleum products, including automotive oil, kerosene, fuel, heavy oil and premium motor spirit, is on the rise. On average fuel consumption in the country has increased from 32 per cent to 48 per cent.

Currently, the 30 million-litre total fuel storage capacity is split among the five depots of Gatsata in Kigali, Kabuye, Rwabuye in the Southern Province and at the Kigali International Airport in Kanombe.

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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