The Kenya Association of Manufacturers (KAM) has released a statement expressing concern over the sharp increase in fuel prices following the latest review by the Energy and Petroleum Regulatory Authority (EPRA).
In its statement dated May 18, the association highlighted fuel prices at Ksh214.25 for Super Petrol, Ksh242.92 for Diesel, and Ksh152.78 for Kerosene. The association further noted that fuel prices had surged by an average of Ksh80 between March and May.
“Fuel prices now stand at Ksh214.24 for Super Petrol, Ksh242.92 for Diesel, and Ksh152.78 for Kerosene, the highest ever in Kenya’s history. Between March and May, the cost of fuel has increased by an average of KSh80,” reads part of the statement.
Although KAM credited the government’s temporary VAT reduction on fuel from 16 percent to 8 percent in April for cushioning consumers, it emphasized that fuel costs continue to heavily influence production, manufacturing, and transport expenses.
ALSO READ:
Former CS Adan Mohamed appointed new KRA commissioner general
“Transportation of raw materials and finished products remains heavily dependent on diesel-powered vehicles, while some manufacturers use petroleum products directly as raw materials,” reads part of the statement.
The association further highlighted that manufacturers depend heavily on Automotive Gas Oil (AGO), Industrial Diesel Oil (IDO), and Heavy Fuel Oil (HFO) in their operations.
“Access to affordable, reliable, and quality fuel is therefore essential to sustaining industrial productivity and competitiveness,” the statement added.
KAM noted that various taxes and levies, including excise duty, VAT, and road maintenance fees, make up nearly 46 percent of retail fuel prices.
According to the association, this heavy tax burden, combined with the high cost of living and rising operational expenses, continues to place immense pressure on both manufacturers and Kenyan households.
“Consequently, the rise in fuel prices will significantly increase production and distribution costs across multiple sectors. This implies that the prices of consumer goods are expected to rise,” reads the statement.
KAM also observed that the fuel cost component in electricity tariffs is expected to increase further, adding to the cost burden on businesses and households.
According to the association, the transport and logistics sectors are already feeling the impact. Rising fuel costs have driven up fares nationwide, making public transport unaffordable for many Kenyans who rely on it.
The association acknowledged the nationwide protests and work stoppages by public transport operators, which began on Monday, May 19, leaving several citizens stranded and unable to report to work.
“For manufacturers, these disruptions result in interrupted operations, delayed production schedules, supply chain inefficiencies, and reduced productivity, ultimately affecting overall economic performance,” reads part of the statement.
To ease economic pressure and keep local manufacturers competitive and productive, KAM advocated for a review of fuel taxes and levies. The association also emphasized the need for targeted fiscal interventions to inject liquidity into the economy.
READ ALSO: Kindiki condemns violent fuel protests, urges calm as Govt seeks solutions
“Such measures would play a critical role in lowering the cost of commodities, stabilizing supply chains, and supporting broader economic recovery,” reads the statement.
KAM reaffirmed its commitment to working with the government and other stakeholders in identifying sustainable solutions to the challenges currently facing businesses, consumers, and the economy at large.
By Frank Mugwe
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
