High oil prices make essential commodities in Rwanda costly

Prices of some essential commodities including vegetables, fuel, grains and detergents have increased, some by 100 per cent, with government officials saying there should not be cause for alarm. In a mini market survey carried out by The New Times team in several of Kigali’s markets , salt has increased from Frw100 to Frw140 per kg while a tablet of soap that used to cost Frw50 has spiraled to Frw100 in most retail shops in the city. Irish potatoes were being quoted higher from Frw100 to 120 per kg, followed by tomatoes from Frw400 to Frw500 per kg. The price of a kilogramme of beans, the common dish in the country has also increased from Frw300 per kg to Frw400 per kg. While the price of peas, consumed by the upscale and middle class soared from Frw600 to Frw1,000 per kg in the last two months, beef that used to cost Frw1,000 is now at Frw1,200 per kg. Attendants at Karo Super market, Gisementi, however, believe they are still paying for the post election violence in Kenya that cut off production and supply of commodities to most countries in the East African region. “Prices of most commodities are high. They have gone up by almost 40 per cent compared to last year,” one of the attendants said. Trade gurus associate the increasing prices in Kenya, a country that suppliers most East African countries with essential commodities to the high world oil prices. The prices of edible oil and imported rice have gone up substantially during the last two months. USA oil has shot to Frw4,000 from Frw2,900 three months ago. Five kilogrammes of Basimati rice that used to cost Frw5,000 increased to Frw6,500. While Tanzania rice that used to cost 480 per kilogramme has increased to Frw600 per kilogramme. Commenting on the rise Finance Minister, James Musoni says prices will soon stabilise. “Usually during the first school term, prices tend to be high.” Musoni however, hastened to say that some factors pushing prices higher are more external, citing the increasing prices of oil on the international market that have pushed transport and production costs high. He reassured Rwandans consumers that the price increase is seasonal and will stabilise soon. As of Thursday, oil rose to $106 a barrel, bolstered by a weak dollar and a drop in fuel stocks. Expert say, surging fuel prices usually weigh most heavily on the emerging urban middle class, making it a struggle to put fuel in cars or motorbikes daily and to pay home electricity bills, in Rwanda, every body feeling the brunt.The cost of fuel has been quoted to record prices in the past months, with a litre of kerosene soaring from Frw480 to Frw623 for the first time ever, while diesel and petrol now costs Frw726. Following a hike in fuel prices, transporters too hiked their charges by an average of 30 per cent per single trip from producing areas to markets in different parts of the country.The present rise in prices of all essential commodities, including grains, vegetables, meat, bananas, Irish potatoes, wheat floor, posh and cassava since the last two months is attributed this increase. GasThe prices of Liquefied Petroleum Gas (LPG) used as a fuel source for industry and domestic use, increased on average by Frw4,000 . The two gas companies, Kobil raised the prices for 11 kilogramme cylinder from Frw25,000 to Frw30,000 while SP oil company increased a 20 kg cylinder to Frw40,000 from Frw30,000. Meanwhile, LPG consumers have expressed their concern over LPG price rise calling for government intervention.Musoni said government was sourcing for an investor to distribute the cylinders within Rwanda. CharcoalA sack of charcoal, the source of energy for average Rwandans in towns has continued to increase. From Frw5,000 last month to Frw7,000 and Frw10,000, per sack this week in most suburbs in Kigali City. Minister Musoni attributes the price increase to the high demand. “Most families use charcoal for cooking because of high cost of electricity. But he also said there is a supply constraint as the country heavily depends on imported charcoal. “There is a ban on cutting trees in Rwanda,” Musoni said.Ends