Rwanda is assessing the impact that the conflict between Israel and Iran may have on its economy, especially through energy supply disruption – in case a significant global shipment route in the Arabian Strait is closed – as well as how to respond accordingly, officials have said. This was exposed on June 19, as Prime Minister Edouard Ngirente was presenting to Parliament the government's achievements in improving citizens' welfare. ALSO READ: What would an Israel-Iran war mean for the global economy? Senator Bibiane Mbaye Gahamanyi asked about the potential impact of the war between Iran and Israel on energy supply to Rwanda as one of the countries relying on fuel sourced abroad. As of June 19, the most recent conflict between Israel and Iran had entered the seventh day since its onset. “Iran says it will close the Strait of Hormuz,” she said, asking to know the impact that could have on Rwanda and the strategies to respond to the problem. The Minister of Infrastructure, Jimmy Gasore, said that the Strait of Hormuz accounts for 20 per cent of the global petroleum product supply. He indicated that fuel supplied from countries, including Saudi Arabia, Iraq, United Arab Emirates, Kuwait, and Iran – which are all located in the Arabian Gulf also called Persian Gulf – gets out through that strait. The strait, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. “In case of a shock in that straight, the impact can be felt on the global market, including us. It may most likely affect us through increase in prices or supply [of fuel],” Gasore said. Meanwhile, Gasore expressed hope that the situation may not be severe, pointing to a possibility for global effort to deal with the issue – given the significance of the maritime route. “We hope that even if it happens, it can be a shock in prices because of speculations, but it cannot be a major shock that can significantly shake the world,” he said. The minister said that Rwanda has a long-term strategy to deal with unpredictable shocks to energy supply. “We have strategic fuel reserves. A team that quantifies petroleum product imports into the country was set up so that we always make sure that our reserves are full such that even if we have a short time shock, we can manage it using the strategic reserves we already have,” he said. “Within such a time, we hope that the world will have responded and that will have been solved,” he said. ALSO READ: Rwanda moves to triple fuel depot capacity Prime Minister Edouard Ngirente said that “as a landlocked country, we always have concerns in case of a global shock,” pointing out that the country avoids being caught unprepared. “Currently, we have a team that is assessing how this shock may reach us and the impact it may have on us because we source fuel abroad,” he said, adding that an appropriate response was also being considered. On March 27, the Minister of Trade and Industry, Prudence Sebahizi, said that Rwanda plans to increase its petroleum reserve storage capacity from the current 110 million litres—enough to last for about two months in case of supply disruption—to at least 320 million litres in the next two years in response to the increasing demand.
No comments:
Post a Comment