Cooking oil prices to shoot by 80% due to Finance Bill 2024; manufacturers warn
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Manufacturers Association warns that the Finance Bill 2024 will increase cooking oil prices by 80%
Manufacturers Association warns that the Finance Bill 2024 will increase cooking oil prices by 80%.
In a press statement released on Sunday, May 19, the Edible Oil Manufacturers Association of Kenya noted that the bill proposed a 25% Excise Duty on vegetable oils and termed it draconian.
If the bill comes into effect, the manufacturers fear that the bill will pave the way for taxation on both the finished products and the raw materials.
“If implemented, this excise duty will trigger an unprecedented surge in the price of cooking oil, a staple in Kenyan households,” read the statement in part.
“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 association noted that cooking oil was integral in the preparation of other products and will lead to the skyrocketing of related edible and non-edible food products.
For instance, the manufacturers projected that bread, which uses cooking oil during the baking process, will increase from Ksh70 to Ksh80 while a bar of soap will rise from Ksh180 to Ksh270.
Margarine is estimated to shoot up from Ksh160 to Ksh300. Other affected products include mandazis, chapatis, and chips.
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“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,” added the statement.
“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.”
The association further believes that if passed, the bill will put over 40,000 jobs at risk and some companies will be forced to scale their workforce therefore worsening the unemployment rate in the country.
“Moreover, the edible oils sector is a significant contributor to Kenya’s economy, directly employing approximately 10,000 individuals and indirectly supporting over 30,000 jobs. The proposed tax risks decimating these livelihoods and destabilizing the manufacturing industry at large,” the manufacturers argued.
The association, therefore, wants the government to scrap the excise duty arguing that it is likely to result in a humanitarian crisis.
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