The Government of Rwanda has announced new temporary measures to address shortage of public transport in the wake of new fuel prices which were announced by the Rwanda Utilities Regulatory Authority (RURA) on Tuesday.
Appearing on Rwanda Television (RTV) to explain the rationale behind the hiking of fuel prices, the Minister of Infrastructure, Dr. Jimmy Gasore, and the Minister of Trade and Industry, Dr. Jean Chrysostome Ngabitsinze, highlighted some of the strategies the government has put in place to address challenges in public transport sector.
RURA announced a hike in fuel prices for the next two months, effective from 4 October 2023. The government utility announced that the maximum retail price for Gasoline (Premium Motor Spirit) is now set at Rwf1,822 a litre, from Rwf1,639, from the prices announced in August -an increase of Rwf183 per litre, in what is the highest increase this year.
The maximum retail price for Diesel (Automotive Gas Oil) is at Rwf1,662 from a previous price of Rwf1,492, reflecting an increase of Rwf170 per litre consumed.
RURA said the revisions are based primarily on price changes of petroleum products registered on the international market. Despite the hike, Dr. Gasore said the government put a subsidy to minimize the increase.
“The Government has been subsidizing fuel prices over the past months. If you look around in the region, we have the lowest fuel prices compared to the countries in the region. Even with the new fuel prices, there is a subsidy from the government,”
“For every litre of diesel a Rwandan buys, there is a subsidy of Rwf135. There is also a subsidy on public transport whereby the government will take care of the increment on the bus fare as a result of the hike in pump prices,” Dr. Gasore said.
Solving Public Transport woes
The new Infrastructure Minister said that the government has come up with temporary measures to deal with the shortage of public buses, amid complaints of long queues, delays and longer times people spend on the road to get to work or home.
Previously it was announced that the government was working with players in the private sector to import more buses but also opening up the public transport sector to allow in more players.
Dr. Gasore said that as part of the temporary measures, other private companies which own buses otherwise used for other rental services will be allowed licenses to transport passengers while existing companies will also be assisted to get financing to expand their fleets.
He also pointed out that rather than buses sticking to their routes, big buses which operate upcountry routes but are not working during peak hours will be allowed to operate shorter routes in the city to help decongest bus parks, without disrupting travel upcountry.
Dr. Gasore also said smaller seven-seater cars which have been engaging in unlicensed public transport will be allowed to register to do it formally, at no fee. A designated parking space will be given to them upon fully registering.
He said such transport service providers will be exempted from paying taxes since it is a temporary measure. He said among other measures, the government will ease the clearance of public transport buses imported into the country, adding that more players in the industry are encouraged to register.
In August, the Government said fuel pump prices were revised in line with a general increase in petroleum products prices registered on the international market. Post-COVID-19, the state said it had subsidized fuel prices to cushion the economy from the impact of the pandemic and the Russia-Ukraine conflict which disrupted supply chains.
The increase is likely to have implications on food and commodity prices. However, the Trade and Industry Minister warned traders against increasing food and commodity prices because the increase in fuel prices should not translate into ripping off citizens.
“Normally, an increase like this indeed is felt in commodity prices but this shouldn’t apply much to agricultural produce as it does, perhaps in the transport and service sectors. If there are any changes in food prices, they should be determined by the changes in seasons, not the change in fuel prices,” Dr. Ngabitsinze said.
He pointed out that inspections will be conducted and those found to take advantage of the changes in fuel prices to increase food and commodity prices will be penalised.