Cooking oil manufacturers warn of 80% price increase

Cooking oil manufacturers have warned of a rise in prices for this crucial commodity if the Finance Bill 2024 is passed in its current form.

In a statement to newsrooms, manufacturers from the Edible Oil Subsector of the Kenya Manufacturers Association called for the reduction of the proposed 25 per cent excise duty.

“In light of these serious implications, we urgently call on the government to remove the proposed 25 per cent excise duty on vegetable oils from the Finance Bill 2024.”

“This tax is not just an economic miscalculation; “It is a potential humanitarian crisis that Kenya cannot afford.”

The bill currently undergoing public participation proposed a 25 percent excise tax on vegetable oils.

The tax is planned to apply to both raw materials and refined oils.

According to the manufacturers, the proposal will cause significant price increases for the product.

According to their estimates, the cost of cooking oil will increase by 80 percent.

The move is likely to make life more difficult for low-income families who rely on the essential product daily.

Cooking oil is an essential ingredient in countless everyday foods such as bread, mandazis, chapatis and chips.

“The excise duty will cause a cascading effect on these items, inflating the price of a standard loaf of bread (400g) from Sh70 to Sh80,” the statement read.

“The ripple effect extends beyond the kitchen and affects other essential products derived from vegetable oils.”

“The price of long bar soap could rise from Sh180 to Sh270, and margarine (250g) from Sh160 to a staggering Sh300.”

The statement further warns that the proposed tax will deal a blow to Kenya’s Kwanza agenda of promoting local manufacturing.

“In addition, the edible oils sector contributes significantly to the Kenyan economy, directly employing approximately 10,000 people and indirectly generating over 30,000 jobs. “The proposed tax risks decimating these livelihoods and destabilizing the broader manufacturing industry,” the statement read.