TOP STORY: Gov’t plans extra fuel price cuts to curb inflation

A study is ongoing to establish a list of sensitive products that need regulation. These are products which have a big impact on Rwandans Government is reflecting on reducing fuel prices to curb inflation, which hit a historical high of 20 percent in September, according to a top official.
Fuel prices have fallen by Rwf168 in a period of one month on the local market. (File photo).
Fuel prices have fallen by Rwf168 in a period of one month on the local market. (File photo).

A study is ongoing to establish a list of sensitive products that need regulation. These are products which have a big impact on Rwandans

Government is reflecting on reducing fuel prices to curb inflation, which hit a historical high of 20 percent in September, according to a top official.

Antoine Ruvebana, the Ministry of Commerce Permanent Secretary said, “We are monitoring the international trends.
“Hopefully if the prices (for oil) on the international market keep falling, we will reduce local prices to probably Rwf650 next month,” he explained yesterday during a phone interview.

Currently, the pump price for both diesel and petrol is Rwf756 per litre. It was reduced early last week by government from Rfw870 for petrol and Rfr880 for diesel, representing a 13.4 percent reduction on average.   

This reduction also came just a month after the government had announced a fall in fuel prices on the local market by 4.8 percent on diesel and petrol from Rwf924 a litre.

However, the Rfw168 fuel price cut in a month’s period has not benefited consumers who continue to dig dip into their pockets to pay for the steadily increasing prices of foodstuffs and other essentials like transport and housing.

The high commodity prices on the local market due to high fuel costs have been the reason for the country’s record high inflation in ten years.

Ruvebana also said: “At the moment we expect transport fares to reduce. We are waiting for Rwanda Utilities Regulatory Agency’s (RURA) decision on transport charges.”

But he noted that RURA’s decision may reduce on commuter transport costs but won’t affect commodity transporters. This is unlikely to provide assurance for low commodity prices because transport accounts for a big percentage of traders’ costs, which influences their pricing decisions.

“It is difficult to regulate commodity transporters. We have to lower fuel prices to promote competition,” the Permanent Secretary explained.

The fact that there’s freedom of pricing and liberalisation of the economy, Ruvebana said that government has less influence on commodity prices.

“Next month, we might feel the impact of reduced fuel prices, but if we can keep these commodity prices stable it is fine,” he added.

He also said that his ministry is to come up with a list of sensitive products, whose prices will be regulated by government.

“A study is ongoing to establish a list of sensitive products that need regulation.

These are products which have a big impact on Rwandans,” he said. This will require cabinet and parliamentary approval to be effective.   

Recent, high prices of foodstuffs have been partly exacerbated by the prolonged drought that hit parts of major food producing areas.

“The first season was bad and the country heavily depended on imports, but we are optimistic that next season will be good,” James Musoni, the Minister of Finance and Economic planning recently told The New Times.

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