The Kenya National Chamber of Commerce and Industry (KNCCI) has sounded the alarm over escalating fuel and logistics costs, warning that the burden is already weighing heavily on transport operators, small and medium-sized enterprises (SMEs), and export sectors.
In a statement, the chamber noted that the latest surge in fuel-related expenses is driving up food prices, transport fares, and production costs across manufacturing and agriculture, compounding the high cost of living for households and businesses.
KNCCI explained that the pressures are unfolding against a volatile global backdrop, particularly escalating tensions involving Iran that have disrupted oil supply chains and pushed up international crude prices.
As a net importer of petroleum products, Kenya remains highly exposed to such shocks, with higher costs quickly transmitted into domestic inflation.
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While KNCCI welcomed the recent downward adjustment in pump prices following the removal of the additional eight per cent VAT by the Energy and Petroleum Regulatory Authority (EPRA), it cautioned that the relief is temporary. Fuel prices remain elevated compared to pre-adjustment levels, with broader cost pressures continuing to weigh on the economy.
The chamber highlighted that transport fares have already risen by up to 25 per cent, while logistics costs have escalated sharply, given that fuel accounts for nearly half of operational expenses. Production costs in manufacturing and agriculture have also increased by between 15 and 30 per cent, threatening business sustainability.
“Kenyan businesses cannot absorb another fuel shock of this magnitude without serious consequences for jobs, prices, and economic stability,” said KNCCI Chief Executive Officer Kenneth Mutahi. He cautioned that without urgent intervention, the crisis could trigger higher food prices, reduced export competitiveness, and slower economic growth.
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To cushion businesses, KNCCI is calling for a comprehensive review of fuel taxes and levies, which account for nearly 45 per cent of the pump price. It is also urging institutionalised public-private sector dialogue and targeted support for the most affected sectors to safeguard jobs and maintain economic stability.
KNCCI appealed for coordinated action to mitigate the ripple effects of global oil shocks on Kenya’s economy, as businesses brace for continued volatility in energy markets.
By Masaki Enock
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