Road maintenance levy on fuel to increase by 50 percent

Within the next three months, fuel dealers will have to pay an extra 50 percent on the Road Maintenance Fund (RMF). Antoine Ruvebana, the Permanent Secretary in the Ministry of Trade and Industry said that the charges will increase to about Rwf60 from Rwf40. “It is the maximum charge proposed by government,” he said. The move could lead to an increase in fuel pump prices.The move is also inline with the Ministry of Infrastructure’s policy paper that proposes a Rwf62.37 charge to align with the Sub-Saharan Africa Transport Policies Programme (SSATP) recommendations. “It is also a commitment from government since 2005 and a covenant agreed with all development partners supporting the road sub-sector,” the policy paper reads in part. Linda Bihire, the Minister of Infrastructure in an interview with The Business Times said the charge will be implemented within the next three months. “This is expected to avail enough funds for maintenance of roads that were negligible under the initial maintenance fund of 1991,” she explained. “The maintenance fund has been so limited due to the constant charge of about Rwf20 that dates many years back,” Bihire added.She explained that whereas government and donor partners fund the construction and rehabilitation of roads, there has always been need for their maintenance. “It would be a waste of resources if we don’t maintain roads, as provided in the road maintenance strategy,” Bihire noted. Ministry of Infrastructure says that the annual RMF budget is estimated at Rwf10 billion of which fuel levy contributes Rwf4 billion while the road toll charged on foreign vehicles contributes Rwf3 billion. The new charges are expected to generate up to Rwf11 billion and increase the RMF budget by 60 percent. “This will also see the RMF annual budget increase from Rwf10 billion to Rwf16 billion thereby bringing the country’s road network to a permanently acceptable condition,” Bihire explained. According to statistics from the Ministry, about 20 percent of roads have been preserved from damage in the last six month. Though the fund also comprises of support from government through the national budget, statistics indicate it has a deficit that is caused by the rising unit cost of road construction and maintenance. The Ministry says that due to lack of funding, there have been continuous postponements of some key priority RMF programmes endorsed by the cabinet in 2007. Statistics show that the fuel levy has been stable at Rwf20.23 on a litre of diesel and Rwf24 on petrol since 1991. The first increment of about Rwf20 was imposed last week, pushing fuel pump prices to Rwf825 from Rwf795. However, officials said the rise in fuel pump prises was partly triggered by rising international oil prices. Bihire said that as more funds are expected, the ministry will increase its road maintenance coverage up to 40 percent next year. Ends

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Road maintenance levy on fuel to increase by 50 percent