Fuel prices up 3.1%

Fuel pump prices on the local market have gone up by 3.1 percent from Rwf860 per litre to Rwf887 for the fourth time in 2009 as a result of rising fuel prices on the international market. The Business Times mini survey indicates that since Friday morning, filling stations across Kigali had added Rwf27 on every litre of diesel and petrol. Antoine Ruvebana, the Permanent Secretary in the Ministry of Trade and Industry said oil prices on the international market had gained by 17 percentage points from $68 (Rwf38,420) to $80 (Rwf45,200) a barrel. “We did not increase according to the international hike but worked together with the Ministry of Finance and Rwanda Revenue Authority. We had to agree and reduce on the levy to cover up the gap to share burden,” Ruvebana explained. He added that government had to heavily subsidise the industry through cutting import duties on fuel products in order to absorb international charges and maintain price stability on the local market. At the beginning or end of every month, the government meets with petroleum dealers to monitor price structures internationally and reach an agreement on local pump price. “We look at price structure on a monthly basis in accordance to international market and transport fees from both coast to coast and road transport plus custom duties and even the margin of importers. Then we agree on the pump price,” Ruvebana explained. There has been speculation that the latest increment is partly attributed to the recent operation charges imposed by the Kenyan petroleum refinery company. However, the PS refuted the speculations.A statement from the company says that the firm will increase the fee from $2.30 (Rwf1,299)to $3.50 ( Rwf1,977) a barrel to cater for rising operational costs as well as raising cash to upgrade its operations in the next five years. Recent increases In June pump prices increased by five percent from Rwf756 to Rwf795 per litre owing to the global financial crisis. In the same month pump prices for both petrol and diesel increased to Rwf825 from Rwf795 per litre. In September they rose by 4.2 percent from Rwf825 to Rwf860, attributable to international prices and government road maintenance charges. The recent volatility of fuel costs on the local market could as well lead to unstable prices of other consumable, hence a rise in inflation that has been contained in single digits for most of 2009. Ends

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Fuel prices up 3.1%