Mandazi and chapati prices are set to increase after edible oil manufacturers say they will pass the law to customers.
Manufacturers of edible oils have presented documents to a parliamentary committee indicating that the cost of imported palm oil, currently at $930 per barrel, could result in a retail price of Sh6,737 for a 20-liter jerrycan, a significant increase from the current Sh4,046.
This hike of Sh2,691 is attributed to potential excise duty increments. Fathi Hayel Saeed, the Edible Oil Subsector Chairperson, along with Vimal Shah, the Managing Director of Bidco Oil Refineries, expressed to the National Assembly Trade, Industry, and Cooperatives Committee that such tax increases could lead to families of four struggling to afford a full meal each day, with some individuals possibly having to skip meals every two days.
“The 10 kg carton of cooking fat will see a price hike of Sh1,098, making it retail at Sh3,230 instead of the current Sh2,132. Additionally, the cost of 400g bread will rise from Sh70 to Sh80, long bars soaps from Sh180 to Sh270, Chapati from Sh15 to Sh25, and mandazi from Sh20 to Sh30, as they are all byproducts of the edible oils,” said Saeed.
According to the manufacturer, citizens were constrained by increased taxes such as housing levies and the Social Health Insurance Fund (SHIF) with minimum wage being approximately Ksh.18,000.
Saeed urged the MPs to rethink the suggested excise duty on edible oils and margarines, along with reconsidering the elimination of the Import Declaration Fee and the Railway Development Levy imposed on the customs value of crude oil imports into Kenya for domestic use.
This adjustment could result in a saving of Sh72 per 20 liters of Jerrycan. He argued against the belief that the government imposed excise duty on edible oils to bolster local manufacturing, stating that such a measure would instead harm local industries due to the same taxes being applicable to them.
Saeed stated that they would now permit more imports into the country and questioned the members about why domestic companies were being undermined with a single stroke of the pen. He called on Parliament to intervene and ensure that this practice was halted.
The Chairperson of the Edible Oil Subsector advocates for the elimination of the two percent Nut and Oil Crop (NOCD) levy, emphasizing that this action would result in a net saving of Sh50 per 20-liter jerrycan.
Additionally, removing the East African Community (EAC) duty, which currently obstructs imports within the region, is projected to lead to a saving of Sh70 per 20-liter jerrycan in the local market, making them more competitive in the export market.
Shah criticizes the government’s decision to control plastics, arguing that alternatives like tins or glass containers for packaging cooking oil are costlier and less hygienic.
Manufacturers face challenges importing within the East Africa region due to higher business costs in Kenya compared to Tanzania and Uganda, where incentives are provided for investments.
