Rwandans to feel pain as transport regulator reviews tariffs

Sunday April 8 2018

A man walks past buses at a station in Kigali,

A man walks past buses at a station in Kigali, Rwanda. Rura has reviewed upwards bus fares to cater for increased cost of operation as a result of several factors, among them high cost of fuel. PHOTO | CYRIL NDEGEYA | NATION 

By JOHNSON KANAMUGIRE
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Rwandans could soon dig deeper into their pockets as prices of consumer goods are set to skyrocket following a review of bus fare.

The transport regulator — Rwanda Utilities Regulatory Authority (Rura) — increased bus tariffs to between Rwf1 and Rwf400 ($0.46) on upcountry routes and a maximum of Rwf60 in Kigali, citing high operating costs.

Rura officials attributed the adjustment to the recent upward review of insurance premiums, high cost of fuel, costs associated with acquiring the cashless payment system and installation of speed governors.

Dr Benjamin Rutimirwa, Rura official in charge of economic regulation, said the stakeholders had in 2015 agreed that the tariffs would be reviewed after every two years or when fuel pump prices exceed maximum reference price of Rwf959 ($1.10) per litre or goes below Rwf817 ($0.94).

Petrol costs, which in 2015 stood at Rwf888 ($1.02) a litre, increased to Rwf1055 ($1.21) per litre while a litre of diesel is currently retailing at Rwf1037 ($1.19).

In setting the new tariffs, Dr Rutimirwa said, Rura considered the overall cost of fuel to avoid another review when pump prices fluctuate further in the near future.

Imported fuel

Rwanda depends on imported fuel whose prices are usually determined by transport costs from the port, fluctuating forex rates and international oil market trends.

The regulator indicates that the tariffs were arrived at after a comprehensive study of the industry as well as consultations with stakeholders.

Beside fuel prices, operators had indicated that all other items they spend on like spares had gone up as a result of the depreciation of the franc.

Particularly, a section of traders who bought vehicles on loans decried the need to service them.

Traders said the review though limited to bus fares, has seen the rise in costs of transporting goods.

“The price for everything is going to rise because Rwf12 per kilogramme charged to transport a load of food commodities from the provinces has now been increased to Rwf20 per kilogramme.

“While the bus fare adjustment has been done by Rura, fleet owners increase charges on cargo as they wish,” said Albine Muragijemariya, a grocer, who sources for products from Eastern Kayonza and Ngoma Districts.

Unlike bus fares that are regulated, costs for transport of goods is usually determined by market forces.

For instance, traders said Rwf10 usually spent on transporting a kilogramme of fresh produce from provinces to Kigali had gone up to between Rwf15 and Rwf20 after fuel prices increased to Rwf1,055 in March.

Emile Ndikubwayo who owns a truck told Rwanda Today the increase in bus fare could push up charges on transport of goods.

Opposition

The implementation of the new tariffs on April 2 was met with a backlash at the Nyabugogo main Taxi Park, where the majority of retail traders, who move move goods from wholesale market on buses to different parts of Kigali complained about the increase.

A survey by Rwanda Today in various market revealed that prices of some commodities had not been increased but traders warned that it was just a matter of days before the extra costs are transferred to consumers.

The upward review of the transport costs happened at a time when consumers have been subjected to the higher cost of housing and utilities.

Inflation report for February shows that despite costs of food and non-alcoholic beverages having decreased to -2.4 per cent from 0.5 per cent in January, the prices of housing, water, electricity, gas and other fuels and transport rose by 2.9 per cent and 2.4 per cent respectively.

The National Institute of Statistics further shows that the cost of energy increased by 8.6 per cent on annual change and increased by 3.6 per cent on a monthly basis.

Market observers noted that the transport tariff adjustment will add burden the poor, who are already grappling with high of living.

Review of bus fare was done in November 2015, during which cost per kilometre was increased to Rwf20 in Kigali and Rwf19 per kilometre for upcountry routes.

“The objective is to ensure that public transport is priced fairly and all costs related to providing sustainable public transport services are reasonably recovered through the set tariff,” said Emmanuel Katabarwa, head of transport department at Rura.

He added the interests of all the public transport beneficiaries were considered in setting the new tariffs while at the same time ensuring quality, sustainability and affordability of the service.