Low storage capacity exposes consumers to high cost of gas
Thursday December 02 2021
Consumers will continue paying high cooking gas prices due to an increase in global demand. PHOTO | CYRIL NDEGEYA
Limited reserves for the much-needed cooking gas could continue to expose users to high bills as effect of high global prices hit local market.
Despite a steady rise in cooking gas demand, market players say limited reserves makes it difficult to cushion consumers against ever rising prices.
For instance, the cost of cooking gas increased to Rwf1,415 a kilogramme from Rwf1,250 a month ago, after importers decried the general rise in global prices of oil and gas.
The latest price change translates into a 13.3 percent increment on costs that had increased by 39 percent in March this year to beyond Rwf1,000 a kilogramme for the first time in three consecutive years.
Energy demand for residential heating in Europe is said to have sparked a rise in costs of gas and could not ease until around March when the cold weather subdues.
Joseph Akumuntu, head of the petroleum product importers’ association told Rwanda Today this and other factors linked to the general fluctuation in oil and gas costs internationally could keep costs high for more months.
“At the moment you can’t predict when prices are going to stabilise, but it’s true that winter in Europe is as always sending gas cost up on the market,” he said during our brief phone interview.
So far, the rise in cooking gas cost has seen the retailers refill the 12kg cylinder at Rwf17,000 from Rwf15,000.
The 20 kilo cylinder is refilled at Rwf27,000 from Rwf15,000 previously while the popular six-kilogramme cylinder since rose to Rwf8,500 from Rwf7,500.
This means that the cost of a kilogramme of LPG gas increased by Rwf560 in a span of six months from Rwf850 around February this year.
A kilogramme of LPG had risen from Rwf860 to Rwf1,200 in April on account of reported supply bottlenecks linked to the Covid-19 pandemic. The Rwanda Utilities Regulator (Rura) data show demand from households and institutions hotels, schools, refugees camp, prisons and restaurants increased demand for LPG followed by manufacturing industries that shifted from diesel to LPG as a source of heat for their boilers.
Their demand caused import volumes to increase by 32 percent from 24.8 million kilogrammes to 32.9 kilogrammes, Rura indicated in its 2020-2021 annual report.
Rura officials say the country needs LPG strategic reserve of at least 19,000 metric tonnes to be used for two months in case of severe shortage.
Official data show the total storage capacity of commercial LPG facilities stands at 703.7 metric tonnes. The stock increased minimally from 693.7 metric tonnes last year.
The latest rise in costs has not gone well with low income Rwandans who heed the call to migrate to cleaner cooking solutions, effectively dumping wood and charcoal.
“Everything else has gone up in costs at a time incomes were crippled by the pandemic. It is a dilemma because even prices of charcoal aren’t low except that one can buy a kilogramme or two unlike for cooking gas,” said Epiphanie Ingabire, a mother of one who is a resident of Kimisagara, Nyarugenge District.