Rwanda is investing approximately Rwf38 billion in a project to establish Liquefied Petroleum Gas (LPG) storage facilities. This initiative aims to enhance the supply, regulation, including pricing, and utilization of cooking gas in the country, The New Times has learned.
The Managing Director of Société Pétrolière (SP), Claudien Habimana, told The New Times the project is being implemented by the private sector in partnership with the government to set up cooking gas storage facilities in Rusororo, Gasabo District.
He indicated that the facilities will have the capacity to store 17.1 million litres of LPG which are equivalent to 8.5 million kilogrammes (or 8,500 tonnes--which is more than double the current LPG demand in the country.) The project is expected to be completed by mid-2025.
Habimana also said the depot will comprise three storage facilities (tanks), an administration block, as well as an offloading and loading area.
Meanwhile, he said, it was initially expected that the project would start in 2021 and be completed by the end of 2023, but there were delays mainly attributed to the expropriation of residents and their property.
Addressing supply, gas price regulation gaps
The Minister of Infrastructure, Ernest Nsabimana, told The New Times regulating cooking gas prices in the country has been constrained by inadequate storage and supply, an issue that the project will help solve.
"We are looking for ways to set up storage capacity (of cooking gas reserve) that can ensure supply of at least three months," Nsabimana said, indicating that currently, the available storage capacity can cover the supply of less than two weeks.
Therefore, he stated that setting LPG tariffs would need to be revised every two weeks. This is because the trade of LPG is marked by price fluctuations, as importing companies are often required to purchase it multiple times from Tanzania and Kenya. This is mainly due to the absence of adequate storage facilities within the country.
"Tariff should last a month or two like it is with fuel (including diesel and petrol)," he said.
According to Habimana, 3.5 million kilogrammes of LPG are sold per month, which he said is the current consumption in the country.
Yet, he said, the available storage facilities in Rwanda have a capacity of 160,000 kilogrammes, which implies a huge gap compared to the needed supply.
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For him, the lack of storage facilities was a major factor in not regulating LPG tariffs.
"You can set a price of LPG today, but when I go to buy it tomorrow, I get it at a higher price than the existing tariff, which becomes a challenge," he said.
He said Rwandan firms engaged in the gas business have to import LPG from Tanzanian and Kenyan firms which also source the gas from other countries that produce it. As such, Rwandan firms pay more on shipping the gas into the country than they would if they purchased it directly from producing countries.
This is the case because the allowed storage period in the facilities of these countries is very limited, and a trader would incur losses in case they exceed it.
He indicated the availability of depots in Rwanda will help address that problem.
According to the Fifth Rwanda Population and Housing Census 2022 by the National Institute of Statistics of Rwanda, the main sources of energy for cooking used by the private households in the country are firewood (76 per cent) and charcoal (17 per cent), and gas (5 per cent).
Under the National Strategy for Transformation, Rwanda targets to reduce firewood use among households to 42 per cent in 2024.
