The cost of dependency

The conflict in Libya dragged on last week amidst signs of fatigue from the Gaddafi camp, who were reportedly seeking talks with NATO on how to end the civil war and a punishing aerial assault to enforce a no-fly zone.Even if these talks were held, they would have been an exercise in futility as leaders of some member states of NATO have stated that the war would only end with the ouster of Gaddafi.

The conflict in Libya dragged on last week amidst signs of fatigue from the Gaddafi camp, who were reportedly seeking talks with NATO on how to end the civil war and a punishing aerial assault to enforce a no-fly zone.

Even if these talks were held, they would have been an exercise in futility as leaders of some member states of NATO have stated that the war would only end with the ouster of Gaddafi.

I imagine Gaddafi would not send his envoys to hammer out details of his surrender given how hard he has fought to stay in power over the last two months.
Then came reports that his son, Saif al-Arab Gaddafi, had been killed in a NATO airstrike.

Needless to say, no one is talking about talks anymore.
What all this means is that, life is going to become even more expensive.

The oil prices have since crossed the $125 line. Our current pump prices of 1060RWF per litre of petrol are a result of an oil price of roughly $118 per barrel so the reader has a rough idea of how much more expensive it is going to get.

The Government through its ministries of commerce and finance as well as BNR has done its best to slow the upward creep of the cost of living especially as it is also a time when food prices are rising independent of the rises in the cost of oil. Disposable income is about to take a hammering.
 
In times like this, one naturally leaps at any ray of good news and last week, this came in the form of an article in The East African that claimed Rwanda was considering cutting its taxes on petroleum to ease the rise of costs on the Rwandan consumer.

The article did not directly cite anyone in particular. Neither did I see anything similar in the local media [maybe I missed it] so perhaps that announcement should be treated with caution.

We’ll have to wait for an official statement to that effect or wait for the unveiling of the 1 trillion franc budget to be sure.
 
Even if the Government made oil imports duty free and limited the profit margin of oil importers, the pump price would still hover above Rwf 800 per litre with a real possibility of crossing Rwf900 in about two months.

It is a measure of how costly fuel has become that most people I know would consider Rwf 800 a great price right now. What no one would realise is that this would cause a shortfall of more than Rwf 50 billion in tax revenues.

In real terms, this is an amount that would reinstate the recently scrapped Government stipend [‘bourse’] to students for the next two years.

In short, the loss of tax revenues would affect several projects aimed at improving the lives of Rwandans.
 In the short term, there’s nothing to be done.

We shall have to grit our teeth and bear with the expensive bite, while the Libyans sort things out.

In the long term, now would be a great time to jump on the alternative energy bandwagon as researchers and come up with a way to create energy out of resources that we have in plenty rather than waiting for the costly products of other people’s research. 

The Minister of Education has pledged to increase funding for laboratories and scientific research; this should be a stimulating enough challenge for any student.

Once upon a time, someone created machinery that would run on fossil fuels abundant or cheap in the inventor’s immediate locale. A few decades later, the technology spread worldwide.

Importing the machines and then fuel had a concomitant effect. Today, we endure the cost of this dependency and the bad news is that it is set to rise.

okabatende@gmail.com

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