KNCCI warns fuel price hike will raise cost of living

NAIROBI, Kenya, May 16 – Kenya National Chamber of Commerce and Industry has warned that the latest fuel price increase will push up the cost of living, squeeze business margins and weaken Kenya’s competitiveness in the region.

In a statement, KNCCI President Erick Rutto said the sharp rise in diesel prices is particularly worrying because the fuel is heavily used in transport, manufacturing, agriculture, logistics and construction.

The remarks follow the latest review by the Energy and Petroleum Regulatory Authority, which raised the price of super petrol by Sh16.65 per litre and diesel by Sh46.29 per litre.

The new prices mean super petrol will retail at Sh214.25 per litre in Nairobi while diesel will cost Sh242.92.

KNCCI noted that although global crude oil prices rose due to geopolitical tensions in the Middle East, Kenya’s diesel prices increased at a faster rate than global oil prices.

According to the chamber, diesel prices in Kenya rose by 23.5 percent between April and May, compared to a global crude oil increase of about 10.7 percent over the same period.

The business lobby said Kenya remains one of the most expensive fuel markets in the region, with diesel prices significantly higher than neighboring countries including Uganda and Tanzania.

KNCCI warned that the latest increase is expected to raise transport and logistics costs by between 10 and 20 percent, push up food and consumer goods prices, increase manufacturing and farm distribution costs, and reduce MSME profit margins.

The chamber called on the government to review fuel taxes and levies, strengthen fuel price stabilization measures, improve price transparency and address inefficiencies in fuel logistics and distribution.

KNCCI also urged the government to accelerate plans for local and regional refining capacity to reduce reliance on imported refined fuel products.