Rwanda's petroleum industry is witnessing a flurry of exits with multinational firms buying off relatively smaller players, a move described by analysts as the fruit of strategy and financial muscle.

Top on the list of firms affected are KenolKobil and Engen, which have been acquired by larger firms, leading to the rebranding of petrol stations across Kigali and beyond. Kobil has been acquired by Rubis while Engen has gone to Vivo Energy.

Swiss petroleum giant Oryx energy has also acquired another energy company, and has embarked on setting up to 10 petrol stations across Kigali. All the petroleum players combined import up to 44million litres per month. “Some of the new players coming into the market with higher investment potential are targeting to re-export into neighbouring countries like DRC and Burundi,” said Joseph Akumuntu, an expert in the petroleum industry, and chairperson of Petroleum importers at PSF, adding that the exit of some players has depended on the strategy of the individual companies.

“The Rwandan petroleum market has the lowest profit margin in the region, largely because the price is highly regulated and prices fixed, many operate on credit and loans. This becomes a problem for some players,” said Mr Akumuntu. Indeed, a number of smaller petroleum companies in the market have been struggling over the last few years, some closing while others have been shrinking and on the verge of closing.

Steven Tumusiime, who runs a sales and marketing company, told Rwanda Today that players have been struggling because the energy market in Rwanda is largely run on credit, which makes it hard for smaller companies to operate.

"Many oil marketing companies are owed a lot of money. Some take as long as six months without paying, others longer yet they have to get in more supplies," he said.

Smaller oil marketing companies like Mogas Rwanda have been shrinking in terms of distribution and reach and continue to struggle due to the tough realities in the market.

Patrick Ngugi, the general manager of Oryx Energy told Rwanda Today smaller companies are finding it hard to operate because they do not have the capital to invest at such a critical time.

"Many are not able to adapt and invest," he said.