The Rwanda Utilities Regulatory Authority (RURA) has announced an upward revision of fuel prices, effective from July 2, 2025. The new prices are set at a maximum of 1,803 Rwandan Francs per liter for gasoline and 1,757 Rwandan Francs per liter for diesel. This decision will remain in force for the next two months and reflects the government’s response to shifting global market dynamics and inflationary pressures.
The communiqué, signed by Director General RUGIGANA Evariste, attributes the hike in prices to “global market trends” and outlines government efforts to “maintain prudent economic management” by ensuring fuel reserves remain adequate.
Globally, fuel prices have surged due to geopolitical tensions, post-pandemic recovery pressures, OPEC+ production controls, and the continued volatility in international shipping routes. These global drivers have had a ripple effect on oil-importing countries like Rwanda.
The economic implications of this adjustment are far-reaching. The transport industry, heavily reliant on diesel, will feel the immediate brunt, potentially compelling public transport operators to increase fares, which would affect thousands of commuters, particularly in urban centers like Kigali, Huye, and Rubavu.
Such fuel price increases typically lead to cost-push inflation, making goods and services more expensive and disproportionately affecting low-income households, thus widening income inequality.
In rural areas, where communities depend on fuel-powered machinery and long-distance transport for market access, reduced agricultural profitability and increased food prices could threaten Rwanda’s food security progress and rural development goals.
For manufacturing and logistics firms, increased fuel costs could lead to reduced profit margins, potential downsizing, or passing costs to consumers, with Small and Medium-sized Enterprises (SMEs) being particularly vulnerable.
To counter these adverse effects, RURA states that the Government of Rwanda has ensured adequate fuel reserves and continues to implement prudent economic policies. These measures include strategic petroleum reserves to prevent shortages and control speculative price surges, as well as substantial investments in alternative energy sources such as hydropower, solar, and biogas to reduce reliance on imported fossil fuels.
The government is also continuing to promote public transport investments, including Bus Rapid Transit (BRT) systems and e-mobility solutions, to reduce dependency on personal vehicles. Furthermore, consideration is being given to targeted subsidies for agriculture and transport to cushion vulnerable sectors from the impact of the price hike.
Public reaction and expert commentary
Public reaction to the price hike has been mixed. While some understand the external factors at play, many express concern over rising living costs.
Claudine Mukarugema, a Kigali resident, says, “I understand prices are going up everywhere, but salaries remain the same. It’s becoming harder to survive.”
Economist Dr. Jean Bosco Uwizeyimana explains, “Fuel price adjustments are necessary in a liberalized economy, especially when global factors are beyond our control. However, the government must enhance transparency and communication around these changes to retain public trust.”
The fuel price hike in Rwanda is a complex but necessary decision driven by external pressures and internal economic priorities. While the short-term effects may challenge households and businesses, the government’s policy framework seeks to ensure long-term stability and resilience.
