Commodities Whose Prices Could Increase With Rise Of Cooking Oil Prices By 80%

The Edible Oil Manufacturers Association of Kenya warned lawmakers in Parliament against passing the Finance Bill 2024 as it risks pushing up the cost of cooking oil by up to 80 per cent.

Terming it a catastrophe for Kenyan households, the association in a statement on Sunday, May 19 alerted policymakers and the public to the severe consequences of the proposed 25% excise duty on vegetable oils included in the proposed Bill. 

Terming the excise duty draconian, the association feared that the tax could apply to both raw materials and refined cooking oils, threatening to unleash widespread economic and social harm across the nation and putting one of the most common products in Kenyan households out of reach.

Inside a supermarket along Thika Road. /MARVIN CHEGE.VIRALTEAKE

"If implemented, this excise duty will trigger an unprecedented surge in the price of cooking oil, a staple in Kenyan households.

"The cost of this essential commodity is projected to skyrocket by 80%, rendering it unaffordable for millions of Kenyans, particularly low-income earners and small-scale traders, commonly known as "hustlers" and "mama mbogas."," the statement read in part.

The association stressed the importance of cooking oil, given that it is not just an isolated product; it is a fundamental ingredient in a myriad of everyday foods such as bread, mandazis, chapatis, and chips (french fries).

With the excise duty in place, the sharp rise in cooking oil prices could force retailers relying on the product for other food and household items to increase the prices of their products. For instance, the price of a standard loaf of bread (400g) would go up from Ksh70 to Ksh80.

The ripple effects extend beyond the kitchen, affecting other essential products derived from vegetable oils. The price of long-bar soap could escalate from Ksh180 to Ksh270, whereas margarine (250g) could rise from Ksh160 to a staggering Ksh300.

"Such price hikes will disproportionately affect the most vulnerable members of society, exacerbating the already high cost of living and plunging millions into deeper financial distress.

"The 25% excise duty threatens to dismantle the government's own agenda of promoting local value addition in agribusiness and could stymie the growth of local edible oil production," added the statement.

The edible oils sector is termed a significant contributor to Kenya's economy, directly employing approximately 10,000 individuals and indirectly supporting over 30,000 jobs.

The association warned that the proposed tax risks decimating these livelihoods and destabilizing the manufacturing industry at large.

"In light of these grave implications, we urgently call upon the government to scrap the proposed 25% excise duty on vegetable oils from the Finance Bill 2024. This tax is not just an economic miscalculation; it is a potential humanitarian crisis that Kenya cannot afford," the association appealed.

Cooking oil being sold at a supermarket. /BUSINESS DAILY