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Rwanda raises pump prices of petrol, diesel on Ukraine war supply concerns

THE prices of petrol and diesel at the pump were increased in Rwanda, the utility regulator said, amid instability in the global oil market caused by Russia’s invasion of Ukraine in February.

Rwanda has stabilised fuel pump prices since May 2021 by foregoing some taxes on petroleum products in a bid to dampen inflation.

But on Monday the landlocked country hiked the price of petrol 8.2% to 1,359 Rwandan francs ($1.32) per litre and diesel 13.9% to 1,368 Rwandan francs ($1.33) per litre for the next two months, said Deo Muvunyi, head of the Rwanda Utilities Regulatory Authority.

“We had seen these expected increases based on international prices,” said Rwanda central bank governor John Rwangombwa.

The war in Ukraine heightened supply concerns that were already underpinning prices around the world. Sanctions imposed on Russia and buyers’ avoidance of Russian oil have already led to a drop in output and raised fears of larger losses.

“The problem with fuel is that it affects other sectors. Fuel had started increasing even before the war (in Ukraine), the war added fuel to the fire,” Rwangombwa said.

Robert Bafakurera, chairman of the private sector federation, said he expected knock-on effects on other items and prices going up. “It may affect all imported products,” he said.

After being hit badly by the impact of coronavirus restrictions the economy expanded more than 10% last year, but Rwanda’s finance minister forecasts inflationary pressures to curb growth to just 7.2% in 2022.

By The African Mirror