On Wednesday, March 19, Members of Parliament voiced their apprehensions regarding the government's plan to impose a 15% fuel duty, arguing that such a measure might lead to heightened expenses for both commodities and services for everyday people. This initiative forms part of a legislative document designed to broaden the present structure governing fuel duties through the introduction of an annual vehicle fee.
The legislation aims to substitute the ongoing flat rate charge of Rwandan Francs (RWF) 115 per liter of petroleum with a percentage-based contribution based on the combined CIF values of gasoline and diesel imports. Mr. Godfrey Kabera, who holds the position of State Minister for National Treasury within MINECOFIN—the Ministry of Finance and Economic Planning—advocated for the proposition, asserting that the static RWF115 surcharge—which was last modified back in 2016—is now outdated due to escalating oil rates alongside growing demands for highway upkeep.
Kabera elucidated his stance: "In 2016, this charge constituted around 15% of the overall cost of gas; however, following increases in fuel charges without corresponding adjustments in our tariff, readjustment appears necessary to align more closely with today’s circumstances."
Government representatives assert that augmentations derived from these changes shall facilitate advancements in transportation networks, diminish gridlock issues, and provide consistent resources required for maintaining roads sustainably.
Meanwhile, MP Jean-Claude Ntezimana expressed worry that enhancing the duty may compromise Rwanda's historically modest yet competitive energy pricing strategy—a policy maintained regardless of the nation being inland-bound. Furthermore, he highlighted how upward revisions could exacerbate logistical expenditures, thereby placing undue pressure upon end-users.
Similarly concerned, another member of parliament named Beth Murora flagged worries pertaining to potentially diminished competitiveness among home-produced articles versus foreign substitutes because of elevated excise taxes. She posed the question, "With certain overseas items reaching markets cheaper relative to indigenous counterparts, what steps will be taken so as not to penalize local manufacturers?"
To allay fears, Kabera assured legislators that increments would occur incrementally and wouldn't substantially affect retail costs immediately—one example cited showed only minor shifts from RWF115 to RWF150 when factoring recent figures, translating into merely RWF35 extra. Moreover, he underscored the importance of direct contributions towards infrastructural projects instead of spreading out payments across broader society. Lastly, he confirmed readiness to implement protective strategies promptly were unforeseen spikes observed down the line.
Currently, discussions continue amongst lawmakers seeking detailed insights concerning prospective effects on fiscal health indicators along with daily living standards before final decisions are reached.
MPs Voice Concerns Over Proposed 15% Fuel Levy
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