Nairobi — Cooking oil manufacturers have expressed deep concern over the introduction of a 10 percent import duty on crude oil warning it will cause significant price increases for cooking oil, an essential staple for millions of Kenyan households.
The Edible Oil Manufacturers Association pointed out that the new levy effective from this month, is expected to have a cascading effect on the prices of everyday products, further exacerbating the financial burden on already struggling Kenyans.
The new import duty came into effect following application of the East African Community (EAC) Common External Tariff, which raises the import duty on crude palm oil from the current zero rate to 10 percent.
This change was officially published in the EAC Gazette No. 18 on June 30, 2024.
"In view of the ongoing uproar and demonstrations against tax hikes across the country, we call upon the government to urgently seek a stay of execution of this new taxes as this single act will cushion millions of Kenyan consumers, especially the vulnerable ones against imminent significant price hikes for these essential household products," read the statement.
Refined soybean oil, RDB Palm Olein, Sunflower oil, and refined corn oil are set to increase in prices after Kenya imposed a duty rate of 25% for one year.
Cooking oil is a key ingredient in the production of various essential products such as soap, bread, mandazi, chapatis, and margarine. The price hike in cooking oil will, therefore, inevitably lead to increased costs for these daily necessities.
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President William Ruto responded to the calls of Kenyans by withdrawing the Finance Bill 2024, stating that it will be shelved to allow for dialogue and a collective approach to financing the current budget.
The Finance Bill 2024, passed by MPs on Tuesday, has sparked widespread outrage, particularly among Kenya's youth, who feel disproportionately burdened by the proposed tax increases.
Protests have erupted nationwide, with demonstrators calling for the bill's rejection, arguing it will worsen the economic hardships faced by ordinary Kenyans.
"The abrupt introduction of the new taxes on crude palm oil and other vegetable cooking oils, done without public participation, has sparked further outcry. Critics argue that this measure will deepen the financial distress of millions of Kenyans by increasing the cost of living,"read the statement.
Previously, the Cooking Oil Manufacturers lamented that the country has become unfavorable for investment compared with neighboring countries like Egypt, Uganda and Tanzania.
They decried that following the erratic increase of taxes every financial year it has made the market unfavorable for investors.
The stakeholders had opposed the introduction of eco-levy at Sh 150 per Kilogram in the Finance Bill 2024 saying its counter effective saying no mechanism have been laid out to signify the efforts of environment conservation through recycling.
The manufacturers expressed the levy will be passed to the consumers since the alternatives in packaging oil which include glass are expensive and not sustainable.
