Rwanda Utilities Regulatory Agency (RURA) is set to announce new transport fares after government slashed fuel prices, by Rwf60 on Monday, in a move that is also likely to trigger a decline in general consumer prices.
Fuel pump prices dropped to Rwf940 from Rwf1,000 in line with the treasury’s proposal is contained in the budge for the fiscal year 2011/12.
While reading the budget in June last year, Finance Minister, John Rwangonbwa, slashed fuel taxes by Rwf100 per litre for both petrol and gasoil to contain inflationary pressures. RURA, the regulator of the transport industry said, yesterday, they are in the process of reviewing transport fares.
“We are reviewing the fares along with transport companies and we are doing (this) very fast as we expect to announce the findings very soon,” RURA’s Director General, Regis Gatarayiha said.
The reduction in fuel prices is the second since the budget reading in June.
“Given that we have no influence on the direction of price movements of these commodities especially oil, one of the actions that Government can take to influence domestic price levels is on the domestic fuel pump price, which can be reduced through reduction of taxes,” the Minister said in June last year.
The Coordinator of Petroleum Special Unit in the Ministry of Trade and Industry, Robert Opirah said that yesterday’s fuel cut was the last in a series of government’s move to reduce then prices of both petrol and diesel by Rwf100 per litre.
“In practice, government first cut Rwf50 in taxes on fuel in July, last year, and Sunday’s announcement was the last Rwf50 of the Rwf100 tax cut per litre of fuel or diesel,” Opirah explained.
Opirah added that there was a possibility for further fuel cuts due to falling oil prices on the international market, hence leading to low transport fares.
With sound fiscal measures and the central bank’s prudent monetary policy the country is likely to maintain a relatively low inflation rate compared to its EAC counterparts. Rwanda is also expected to maintain a healthy agriculture output this year, which will help ease food inflation.
Central bank Governor, Clever Gatete told Business Times, last week, that BNR targets to contain inflation at 7.5 per cent this year, down from 8.34 per cent in December last year.