A Temporary Respite for Burundi

After weeks of fuel shortages that severely disrupted daily life and businesses across Burundi, a temporary relief came this week as petroleum supplies finally arrived, allowing the fuel queues that had become a common sight in Bujumbura, the country’s commercial capital, to disappear. The scarcity had led to widespread complaints from citizens and transport operators, with long lines stretching outside fuel stations for days. The arrival of fuel brought immediate relief to many, particularly motorists and public transport operators, but concerns remain over the adequacy of current fuel stocks to meet ongoing demand.

A spot check in Bujumbura confirmed that the previously long and frustrating fuel queues had vanished, with motorists now able to fuel their vehicles without delay. This development marks a significant but tentative step towards normalcy for the country’s economy, which had been struggling with transportation delays, increased costs, and reduced mobility due to the fuel crisis.

Relief for Transport Operators and Citizens

Public transport operators, particularly bus and taxi drivers, have expressed relief at the improved availability of fuel. One taxi driver stationed at the Petro Muha fuel station in southern Bujumbura said that both drivers and customers had suffered from the exorbitant transport costs that skyrocketed during the fuel shortage.

“Our customers were not happy with the cost of transport. We were also not happy with it because customers were complaining, but now we thank God because we are buying fuel at the price set by the government,” he said. However, he also emphasized the need for consistent fuel availability to prevent further disruptions.

This sentiment was echoed by many citizens who experienced the sharp rise in transportation costs during the shortage. With buses and taxis struggling to acquire enough fuel to operate, fares had soared, exacerbating the financial burden on everyday commuters. The restoration of fuel supplies has brought down fares to more manageable levels, but there remains anxiety over whether this will be sustainable in the long term.

Limited Fuel Allocations and Regional Disparities

Despite the improvements, there are still significant concerns over the adequacy of the current fuel supplies. Fuel allocations remain restricted, with bus operators allowed only 50 liters of fuel per day. For operators making long trips from Bujumbura to rural areas, this is insufficient. As a result, many buses have been forced to prioritize shorter routes within proximity to urban centers where they can more easily refuel.

This situation has led to an unintended consequence for passengers traveling to more remote regions. For example, passengers traveling from Bujumbura to Muyinga, a northeastern town 196 kilometers away, have to pay double the usual fare. The journey now involves taking a bus to the closer town of Ngozi, 130 kilometers away, and then boarding another vehicle for the remainder of the trip. The additional costs and logistical inconveniences continue to plague travelers, highlighting the uneven recovery from the fuel crisis in different parts of the country.

Government Intervention and Warnings

In response to the continued challenges, Burundi’s government has stepped in to address the issue of inflated fares. Minister of Home Affairs, Martin Niteretse, issued a stern warning to public transport operators who have been accused of charging exorbitant prices during the fuel shortage. He emphasized that operators found exploiting passengers through overcharging would face stiff penalties.

Niteretse’s warning reflects the government’s desire to maintain control over the economic impact of the fuel crisis. However, the ability of the government to enforce such penalties and ensure compliance across the country’s widespread public transport sector remains to be seen. Operators may argue that fuel shortages and logistical challenges necessitate higher prices, creating a potential area of tension between the government and transport industry stakeholders.

Underlying Issues: A Deeper Look at Burundi’s Fuel Supply Chain

While the immediate crisis appears to have been alleviated, the deeper issues in Burundi’s fuel supply chain remain unresolved. Burundi, like many other nations in sub-Saharan Africa, is highly dependent on fuel imports. Any disruption in international supply chains or geopolitical instability can cause severe shortages in the country.

This particular fuel crisis can be traced to various factors, including disruptions in the global oil market. Several African countries, including Burundi, have faced fuel shortages in 2023 and 2024 due to fluctuations in crude oil prices and global supply chain bottlenecks exacerbated by the war in Ukraine, sanctions on Russia, and geopolitical tensions in the Middle East. As Burundi imports its petroleum, it has little control over the external factors that impact the availability of fuel within its borders.

Moreover, there have been reports of logistical problems at Burundi’s key entry points for fuel shipments. The landlocked country relies on neighboring countries, particularly Tanzania, for access to ports and fuel transportation. Disruptions in fuel transit routes or delays at customs can further exacerbate shortages, leading to situations like the one recently experienced.

Economic Ramifications: A Ripple Effect on Various Sectors

The fuel crisis in Burundi has highlighted the vulnerability of the country’s economy to external shocks. Transportation is a critical sector in Burundi, supporting the movement of goods, services, and people. A prolonged fuel shortage not only impacts the ability of businesses to operate smoothly but also drives up the cost of essential goods and services, contributing to inflationary pressures.

Agriculture, which accounts for a significant portion of Burundi’s GDP, has also been affected by the fuel crisis. Farmers and agricultural traders rely on transport to get their produce to markets. The increased transport costs and reduced availability of fuel have made it more expensive and challenging for farmers to distribute their goods, potentially leading to spoilage and loss of income.

Furthermore, the manufacturing and retail sectors in Burundi have faced operational difficulties due to fuel shortages. Factories and retail businesses, which rely on consistent fuel supplies for transportation and logistics, have reported decreased productivity. This has had a ripple effect on employment and overall economic activity, further straining an economy that is already grappling with high poverty levels and limited industrialization.

The Role of Regional Cooperation

To prevent future fuel shortages, Burundi must explore regional cooperation and strategies to secure its energy needs. The East African Community (EAC), of which Burundi is a member, has the potential to play a crucial role in mitigating such crises. Through joint investments in infrastructure, such as pipelines and storage facilities, the EAC can help member states like Burundi ensure a more stable supply of fuel.

In addition, Burundi could benefit from regional energy agreements that allow for fuel-sharing arrangements in times of crisis. Such agreements could involve neighboring countries like Tanzania, Rwanda, and Uganda, which could provide temporary supplies in case of shortfalls.

Improving the efficiency of customs and transportation routes is another critical factor in ensuring consistent fuel supplies. Delays at border crossings and inefficiencies in road networks can prolong fuel shortages, as seen during the recent crisis. Enhanced regional collaboration on infrastructure development could help streamline transportation, reducing the likelihood of future supply disruptions.

Long-Term Solutions: Diversifying Energy Sources

To avoid a recurrence of the fuel crisis, Burundi must also consider diversifying its energy sources. The country’s heavy reliance on imported petroleum leaves it vulnerable to global price fluctuations and supply chain disruptions. Investing in alternative energy sources, such as renewable energy, could provide a buffer against future fuel shortages.

Burundi has significant potential for renewable energy development, particularly in hydroelectric power. The country is home to numerous rivers that could be harnessed for hydroelectric generation, providing a cleaner and more sustainable source of energy. Expanding the use of solar power, which is abundant in the region, could also help reduce the country’s dependence on imported fuel.

Conclusion: A Fragile Recovery

While the recent arrival of fuel supplies in Burundi has brought temporary relief, the underlying challenges remain. The limited availability of fuel, regional disparities in access, and the broader economic ramifications of the crisis continue to loom over the country. The government’s ability to enforce regulations on fuel prices and ensure a steady supply of petroleum products will be crucial in the coming months.

In the long term, addressing Burundi’s vulnerability to fuel shortages will require a multifaceted approach, including regional cooperation, investment in infrastructure, and a push toward diversifying energy sources. Without these measures, the relief experienced today may only be temporary, and the country could face similar crises in the future.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

19th September, 2024