Thursday 11 December 2008

The next round of fuel price negotiations: Inflation

BY GEORGE KAGAME

As this year's festive seasons begins, Kigali is facing fuel shortages and forcing many car owner to leave their vehicles packed at home and use public buses or the Kigali trademark, the Moto to conduct their daily businesses. The buses and motos are currently enduring long queues on many petrol stations around the city in the evenings as they fill up for the next day. There's a looming fuel crisis.

A disagreement between a cartel of fuel importers in the country and government is causing this misery. Apparently fuel importers were displeased by the recent reduction in the prices of fuel. The decision to reduce fuel costs was reached after negotiations between government and the importers, documents were signed, smiles abound and photos were taken. The press was invited, good news had to be told and shared.

As can be expected in the hustling world of the petrol dollar, a few weeks after the drama above unfolded. Government and petrol investors were back at the negotiating table. At the beginning of this week, the monthly meeting between the two was locked in a stalemate as fuel importers were unrelenting in their determination to charge a higher rate per average costs, point which government objected to. The issue at contention is about a mid ground price at which to sell a litre of fuel can be sold at petrol stations. The government insists on one and the importers want another, the former has insisted that fuel costs should keep pace with inflationary gaps in the economy. Not only are the importers finding this kind of talk bothering, they also refuse to understand it. As ever the case with these things, the involvement of the press in the matter was limited to press conferences and PR letters.

The talk of inflation and pump prices has left many in our great Kigali wondering who is fooling who! At a recent introduction ceremony in Cyangugu in the other province left some in the brides entourage wondering. Their deliberations were captured by our correspondent Sikiofupi. He presents its excerpts here below.


Mtupu: If the government is concerned about commodity prices and inflation, why don't they hold negotiations with land lords in the country, supermarkets, restaurants and private sector employees. These are the people in dire need of inflation lectures.

Msani: Who cares about prices of commodities, the Rwanda Bureau of standards? I choke!!!!!!

Mteja: Who cheats the consumers in this country? It it government high taxes, investors? We ask the private sector federation? Huh, don't mention that, what do they do kumbe? Hire consultancies and advocate. By the way, is there any trade union in our country?

Mhudumu: Today my supervisor told me to clean up and freshen the 'salle', he said that people in clean black suits, white shirts and red ties from Kigali are coming over the weekend to discuss development indicators in Rwanda. They will be escorted by other even more savvy people from The World Bank here to release a report showing indicators of growth in the country for 2007-8. I will inform you anything they talk about. The government is likely to welcome the report upon its release but a few weeks later the same government will be criticizing it.

And early next year they will hire a glamorous consultancy firm to advise them on what to do about the report. The private sector federation will also hire another consultancy firm probably from South Africa to advise it also. The investors meanwhile will wait for another investment conference to voice their frustration about Doing Business in Rwanda, high taxes, poor service delivery culture, these 'slow and backward' Rwandans'. At least i will be kept busy organizing the salle. The consumer will, well, what will you do?

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