PAULUS KAYIGGWA gets to the bottom of why we are paying more for basic goods

The increase in the price of basic commodities has added to the heavy burden of many families across the country struggling to make ends meet, said John Harelimana an importer of basic goods

According to a survey conducted in Kigali by Sunday Times, importers claim that high transport costs brought about by high fuel prices on the world market has  played a role in prices changes of all goods.

Harelimana said that transporting of goods these days is very expensive, "I used to pay transport fee of $8,000 for a 40 foot container but now I pay $11,000.” 

"If the prices of fuel on the world market are stable for some time, even the costs for basic needs not only in the country but also in other countries would be stable and become affordable,” he explained.

He observed that players in different markets have an intuitive inclination to adjust upwards prices of goods and services following any fuel price increase. And such behavior has at times resulted in price increases that are significantly disproportionate to rises in the cost of fuel.        

Recently, the Government announced that it has reduced petrol and gas oil prices by 4.761 per cent, due to a slight decrease in fuel prices on the world market.

This directly translated into pump prices for petrol and diesel going from Frw924 to Frw880 while diesel was reduced to Frw870 from Frw924.

And such a translation was believed to be good news for consumers, because reduced fuel costs may mean reduced costs for consumer goods as well.

But Janvier Mugwaneza explained that the reduction in fuel prices is just a small margin which does not call down the skyrocketing prices.

"In the past, I used to pay transport fee of $1.5 per a kilogramme of goods but now I pay $1.8,” he claimed.
Since April this year, a kilo of sugar has increased from frw500 to 800, rice Frw500 to 700, washing soap from Frw100 to200, a litter of cooking oil Frw500 to 800 in most of retail shops in town.

"It’s a painful situation to people who are just struggling to find ways of surviving,” he said sadly.

Mugwaneza further believed that fuel increase has even driven up the costs of foodstuffs which is pushing many families towards eating once a day.

Even if you talk to traders dealing in foodstuffs, fuel prices will be brought out a single cause of price changes of foodstuffs
Jastine Mbabzi, a trader of foodstuffs in Kimironko market, said that the cost of transporting foodstuffs from where they are grown to the market has almost double.

She explained that customers used to buy a kilogram of Irish potatoes at Frw60 in various markets but it’s more than doubled to Frw150.

 "I might take it to be cheap but very expensive and not affordable to others who struggling to live,” she laments.
Another businessman who declined to be named said that some times they are forced to increase prices on certain goods to recover working capital they have encountered as losses.

"At times we make losses along the way either by theft or by product damage and an increase in prices becomes the only alternative to recover the working capital,” he explained.

He further claimed that sometimes transporters are not reliable; they open our cargos and steal goods.

An official from ministry of Trade, Industry and Commerce who spoke on a condition of anonymity during a telephone interview, said that although fuel is still a global problem, business people have to be patriotic, realistic, and honest when dealing with their consumers. 

 "Sometimes consumers need to be given a simple explanation on what brought an increase in price of a certain product,” she advised.

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