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Kenyans will wait much longer for cheaper cooking oil as shortage of dollars join taxes in worsening the already bad situation in the market, edible oil manufacturers have warned.

They said enforcement of various taxes, and shortage of dollar have worsened situation in the industry already reeling under the disruption caused by Covid-19 pandemic and war in Ukraine to the global supply chains.

The producers say introduction of a 10 per cent duty on plastic containers, Ministry of Agriculture’s enforcement of a 2 per cent levy on all crude Palm oil (and other crop nuts) and County and national government taxations on the same aspects will further drive the prices up.

Abdulghani Alwojih, chair of the edible oil sub-sector of Kenya Association of Manufacturers (KAM) warned that the pandemic had greatly affected two largest world crude palm oil producers; Indonesia and Malaysia and the emerging issues in the local market will not help matters.

“The two had to lockdown the country, crippling harvesting and milling activities. This caused a fall in the supply amidst steady demand resulting in an inevitable price hike,” said Alwojih.

Industry players are now calling for a review of some of the taxation measures to prevent the manufacturers from passing on the full effect of these compounded factors to the consumers.

In earlier interview, Alwojih who is also the General Manager of Golden Africa Kenya Ltd said there is still much that can be done especially from the government, to cushion consumers from further strain in their budgets.

He identified scrapping of railway development levy and import declaration fee, review the cost of fuel and electricity among other possible interventions.

Raw materials

Cost of cooking oil has risen by 400 per cent in the past six months with a litre of the commodity now retailing at around Sh400. 

The tough operating environment has already led to the closure of one of the refineries, Pwani Oil, citing lack of dollar in the market that has made importation of raw materials a nightmare.

The manufacturer while closing shop said Friday that banks were only processing half of the dollar orders it requires to pay the suppliers of crude palm oil imports from Malaysia amid stiff global competition.

“Forex condition in the country, especially against the dollar, has greatly increased the cost of importing raw material. The dollar now selling at Sh116 from Sh103 six months ago – slightly over 10 per cent increase,” said Alwojih.