DOWNSTREAM PETROLEUM SUB-SECTOR

Rwanda currently imports petroleum products from either the central or the northern corridor. The cost of oil imports is on average 25% of total import costs and accounts for 55% of the entire export revenues. The demand for petroleum products is forecasted to grow at an average of 10% each year between now and 2020. The cost of procurement has an important macro-economic impact.

Under the revised law establishing RURA, the Regulatory Authority is entrusted with the regulation of the downstream petroleum infrastructure, i.e., oil storage depots, petrol service stations and the importation, transmission, distribution, trade of Liquefied Petroleum Gas (LPG) as well as construction and operation of LPG storage and filling plants.

 i.   Oil storage depots

Overview

Rwanda has an ambitious target of increasing its strategic storage capacity to an equivalent of 4 months from 1.5 months of consumption requirements, the target being to have a storage capacity of 150 million litres by 2017. Currently the total fuel storage capacity splits among 5 depots in Rwanda which is 31,700 M3. Due this reason, the GoR has been encouraging the private sector to consider investing in oil storage depots to cater for the growing demand and supply security at times of necessity given the uncertainty surrounding the supply which comes exclusively overland.

The following table indicates the location and the storage capacity of the existing fuel depots.

 

Location

 

Petrol

(M3)

Diesel

(M3)

Kerosene

(M3)

Fuel oil

(M3)

Jet fuel

(M3)

Total

(M3)

Gatsata

7200

5100

1500

1900

0

15700

Kabuye

3000

2100

0

600

0

5700

Bigogwe

3000

2000

0

0

0

5000

Rwabuye

1900

1900

0

0

0

3800

Kanombe

0

0

0

0

1500

1500

Total

15100

11100

1500

2500

1500

31700

The potential investors that have shown their interest in building oil storage depots are OILCOM which is planning to put up 19,000M3 while Société Pétrolière (SP) is planning to set up an oil storage depot of 16,000M3 in phase one that can be upgraded to 40,000M3 in the second phase.

RURA role

The Authority has developed, in collaboration with stakeholders, the Aboveground Petroleum Storage Facilities Regulations in 2012 and compliance to the Regulations will kick start very soon. Meanwhile, inspections are regularly conducted to existing oil depots while new projects of oil storage facilities are being closely follow-up.

 ii.        Petrol service stations

Overview

Petroleum products account for 11% of the primary energy use in Rwanda.  The products are mainly used for transportation and more than 80% is consumed as diesel or petrol. The total use of petroleum products corresponds to a daily oil consumption of 5,600 bbls.  The use of petroleum products is expected to grow with an annual average rate of 10%.  The combination of high prices of fuels on the international market and the very long and expensive overland supply route is resulting in very high prices for petroleum products in Rwanda.

Petroleum products sold at the Rwandan market include white fuels (gasoline, diesel, kerosene, various industrial & auto lubricants, etc.); black fuels (bitumen, black oil, etc.) and other petroleum products such as Liquefied Petroleum Gas (LPG).

Twenty active oil-marketing companies are currently involved in the importation, transportation, storage, distribution & wholesale of petroleum products operations: SP, KOBIL, ENGEN, MEREZ, GEMECA Petroleum, Source Oil, Hash Energy etc.

RURA role

In order to address the general concern of petrol filling stations being constructed in a sub-standard and unsafe manner, RURA, in collaboration with stakeholders, issued guidelines for the construction of petrol filling stations in 2011.

After the adoption of the Rwanda Standard on “Installations, modification and decommissioning of underground storage tanks, pumps/dispensers, pipework at service stations and consumer installation” (RS 744-1:2012), RURA embarked on the development of Draft Regulations on Construction and Operation of Petrol Service Stations to be validated in a stakeholder meeting scheduled in the near future.

iii.        Liquefied Petroleum Gas (LPG)

Overview

The national energy balance shows that 86% of all energy consumed in Rwanda is utilized in the form of biomass. In order to reduce the strong reliance on biomass, various strategies were identified in the forms of alternative energy including LPG to replace wood and charcoal for domestic and institutional heating and cooking.

Distribution of LPG in Rwanda is through the mainstream of oil marketers who source the product through Kenya and Tanzania by road using bulk trucks of maximum 20 Mt. Retail channels of distribution are through service stations, distributors and supermarkets in an assortment of cylinder sizes ranging from 3 Kg to 35 Kg.

RURA role

RURA developed Liquefied Petroleum Gas Regulations in 2012 and licensing started in June 2013 and is mainly targeting LPG big dealers that will shortly be followed by LPG retailers.