NAIROBI, Kenya – The Edible Oil Manufacturers Association of Kenya (EOMAK) has raised alarm over a recent spike in cooking oil prices, attributing the surge to the newly imposed 10 percent import duty on crude palm oil.
The tax, introduced abruptly without public consultation, is exacerbating the financial strain on millions of Kenyans.
Billow Kerrow, spokesperson for EOMAK and owner of Darford Industries Limited, highlighted the cascading effects of the tax during a press conference on Tuesday.
“In just a month, a 20-litre jerrican of cooking oil has shot up from Sh3,800 to Sh4,200,” Kerrow stated, pointing out that this increase is also driving up the costs of essential products like soap, bread, mandazis, chapatis, and margarine.
Crude palm oil, a critical ingredient in the production of cooking oil, now faces a 10 percent import duty effective from July 1, 2024.
This change follows Kenya’s implementation of the East African Community Common External Tariff, as documented in the EAC Gazette No. 18, dated June 30, 2024.
The tax’s introduction came shortly after President William Ruto opted not to sign the contentious Finance Bill, 2024, which proposed a 25 percent tax on both raw and refined vegetable oil.
Kerrow lamented the multiple taxes that edible oil manufacturers in Kenya are currently subjected to, including a 2 percent Nuts and Oil Crops Development Levy, 2.5 percent Import Declaration Fees, 1.5 percent Railway Development Levy, 10 percent Import Duty, and 16 percent VAT.
“Effectively, 32 percent of the cost of a bottle of cooking oil goes to taxes,” he remarked.
EOMAK is urging the government to reconsider the new tax to alleviate the burden on Kenyan consumers, particularly the vulnerable.
“Halting the execution of this tax will protect millions from significant price hikes on essential household products,” Kerrow appealed.
The escalating taxes have not only impacted domestic prices but also made Kenyan edible oil noncompetitive in international markets.
“We’ve lost our export markets to Uganda, the Democratic Republic of Congo, and South Sudan, who now prefer importing from Malaysia,” Kerrow noted.
