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Rwanda: Govt subsidizes fuel to contain price surge

The price of a litre of diesel has increased to Rwf1, 503, while that of petrol has gone up to Rwf1, 460.

Diesel cost rose by 9.9 per cent or Rwf135 a litre, while that of petrol rose by 7.4 per cent or Rwf101 a litre.

The new prices were announced by Ernest Nsabimana, the Minister of Infrastructure on Thursday, June 9, 2022, during a programme that was aired on Rwanda Broadcasting Agency. 

Nsabimana observed that though there was an increase in fuel costs to be incurred by consumers, the Government has provided significant financial support to contain their surge– about Rwf200 for both a litre of diesel and petrol. 

Overall, he said that the Government is going to subsidise fuel costs with over Rwf14 billion in two months — June and July – the support he said will help prevent transport costs from going too high. 

Such subsidy is in the form of tax that the Government will waive on fuel consumption.

Without the subsidy, prices would have risen to Rwf1676 for petrol and Rwf1719 for diesel.

“If a litre of petrol or diesel increases by Rwf300, it can have a huge impact on the daily lives of people such as the transport cost of those who go to bring potatoes from Musanze [District], sand, cement from Bugarama [in Rusizi District], milk from Mutara (Nyagatare District), or vegetables,” Nsabimana said.

Commenting on the cause for the price increase, the Minister said that the main factor is the Russia-Ukraine war impact, indicating that Russia is one of the major oil producers. 

“The European countries that have been importing about 40 percent of the fuel they need from Russia are now sourcing it from the Arab countries. And, that is where regional countries, including Rwanda, have been sourcing petroleum products. That is contributing to the increase of fuel prices,” he said. 

As usual, these prices will be reviewed after two months.

Meanwhile, he said that since May 2021, the Government has been subsidising fuel prices in order to avoid a situation where they would be too high and have a big negative impact on Rwandans. 

The above-mentioned new commitment will bring the total Government subsidy to fuel, to about Rwf44 billion since May, meaning it has offered about Rwf30 billion support in this regard so far.

Jean Marie Vianney Gatabazi, Minister of Local Government said that the Government’s subsidy on fuel is important in terms of lowering the cost of the needed goods and services, such as foodstuff and transport.

He warned people against fleecing residents by unjustifiable cost raise, but rather, make good use of the Government support. 

Source: The New Times

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