Rwanda Consumer’s Rights Protection Organization (Adecor) has urged policymakers to reduce commodity prices due to a significant decline in fuel prices.

Damien Ndizeye, the Executive Secretary of Adecor, said that a market assessment made by the association indicated that at the local market, prices of commodities, especially staple foods have been increasing since 2012 and traders raised high fuel prices as the root cause.

He said it was only fair that the prices reduced, especially since fuel prices have been slashed by Rwf135 per litre.

The latest prices released by the Ministry of Trade and Industry on December 26 set the pump price for both petrol and diesel at Rwf895.

"We do not understand why traders become reluctant to lower the prices when fuel prices drop. We want a win-win situation for sellers and buyers,” Ndizeye said.

Traders and buyers in Kimironko and Remera markets in Kigali told The New Times on Tuesday that prices of most commodities have remained the same despite the reduction in fuel prices.

Eric Sekamana, a trader at Kimironko, said: " Some commodity prices increased instead. At the beginning of last month, foe example, rice (Pakistan variety) went up to Rwf800 from Rwf700 and sugar Rwf700 from Rwf600 per kilo.”

Dative Ingabire, a buyer found at Kimironko market, said she had expected to benefit from the decline in fuel prices but was disappointed to find the price of potatoes instead increased by Rwf20 per kilogramme on Monday, the same day Rwanda Utilities Regulatory Agency (Rura) announced a reduction in transport fares.

Low expectations

As traders and consumers long for a reduction in prices at the local market, the Ministry of Trade and Industry (Minicom), said Rwandans should not expect quick change since prices are mostly determined by the market forces of demand and supply.

The minister of Trade and Industry, Francois Kanimba, further explained that people should understand that general pricing in the economy does not depend on fuel prices alone but also many other factors such as competition and depreciation of local currency which may affect demand.

Citing an example of Rura which based on the new fuel prices to revise the transport fares, Minister Kanimba said it is possible for players in the free market to use new fuel prices to revise other prices.

Rura announced the revised transport fares charging Rwf18 from Rwf19 per kilometre effective Tuesday.

Expert’s view

Though consumers urge the government to lower prices of commodities, Charles Sebaruma, a macro economics lecturer at College of Business and Economics, University of Rwanda, told The New Times that the reduction in price of a certain commodity is dependant on its relationship with the fuel prices.

"When there is a decline in fuel prices, other prices may reduce sooner or later depending on the nature of relationship,” he said.

"Transport fares always change immediately because they have a direct connection with fuel prices, but to other products, the impact takes three to six months to be felt depending on different factors,” he added.

"A farmer, for example, who spent a lot on seeds will not immediately lower down prices due to a drop in fuel prices,” the academic said.

editorial@newtimes.co.rw