Pain for consumers as effects of fuel tax begin to bite

Kenyans can brace themselves for hard times ahead following the increase of fuel prices that has since affected the prices of various commodities across the country.

Just a week after President Uhuru Kenyatta signed into law the controversial Finance Bill forcing Kenyans to pay an eight percent value added tax on petroleum products, life as Kenyans knew it has been changing for the worse. And fast.

From raised fares to increased prices of sugar and maize flour, Kenyans have been bearing the brunt of expensive goods and services since the law was passed.

In Nakuru, traders said they were forced to incur extra costs to transport their goods from the farmers to the market.

“I sell 1kg of tomatoes at Sh150 up from Sh100. The cost of transporting fresh produce from Oloitoktok increased to Sh6,000 from Sh4,000,” Ms Jane Kwamboka said.

“I buy my potatoes from Ndondori at Sh6,000, but by the time they arrive in the market they cost Sh8,000,” Mr Peter Shadrack said.

FOOD

At local supermarkets, the prices of essential commodities such as flour, cooking oil and sugar have increased.

In Nyahururu, a 22kg bucket of potatoes is retailing at Sh850, up from the previous Sh250.

One kilo of peas is retailing at Sh70 from Sh40 while a kilogramme of onion has increased by Sh20 to retail at Sh70, with a kilo of carrot selling at Sh40 up from Sh30.

A 90kg bag of the popular ‘wairimu’ beans is retailing at Sh9,500 up from Sh7,700 while ‘Rose cocoa’ beans are selling at Sh8,000 per 90 kilogramme bag, up from Sh7,000.

A 90kg bag of black beans is selling at Sh12,500, up from Sh10,500.

At the popular Aberdares Butchery in Nyahururu town, a kilo of mutton is going for Sh480 up from Sh460.

In the border county of Busia, Kenyans are opting to cross the border to buy not only fuel, but also other household products.

FUEL

In Busia, a litre of petrol is retailing at between Sh124 and Sh125, diesel selling Sh110 and kerosene 100.

In Uganda, petrol sells at UGX4,080 (Sh110) with diesel retailing at UGX3,750 (Sh101) per litre — a huge difference that motorists are using to cushion themselves.

“We save a lot when we fuel in Uganda. Whenever we increase fare we lose business to our counterparts in Uganda so the only option is to match them with their fuel,” said Mr George Otwane, a boda boda operator in Busia town.

This even as commuters from Busia to Kisumu, Bungoma and Mumias have no option but to shoulder the cost of increased fares.

Passengers from Busia to Kisumu are being charged between Sh350 and Sh400, up from Sh300, while those heading to Bungoma pay Sh300 from Sh250.

Commuters from Mumias to Kakamega are paying Sh150, up from Sh100, while those travelling from Kakamega to Kisumu are charged Sh300 from Sh250.

In Kakamega, prices of petrol and diesel are Sh118.32 and Sh109.89 per litre respectively.

UNGA

The price of sugar at Tuskys supermarket in Kakamega had gone up by Sh56 from Sh240 per 2kg packet to Sh296.

Other products whose prices have been affected include milk which costs Sh52 from Sh50.

Maize flour is still selling above the proposed government price of Sh75.

Most of the supermarkets sell the flour at between Sh80 and Sh85 per 2kg packet in Kakamega, and between Sh90 and Sh110 in Vihiga.

In Kwale, a 2kg packet of maize flour has dropped from Sh110 to Sh100, while a kilo of maize sells at Sh30 from Sh35.

This, even as Agriculture Cabinet Secretary Mwangi Kiunjuri warned against the selling of maize flour above Sh75 per 2kg packet.

“There is no discussion over this directive and those who go against it will face the law. We will not allow Kenyans to be exploited by millers and traders,” Mr Kiunjuri said.

“The price of unga cannot remain the same when millers buy a bag of maize at Sh2,800 and now when it is going for Sh1,600,” he said on Friday.

JOBS

In Kwale, the price of a kilogramme of sugar is currently retailing at Sh135 from Sh80.

A 2kg packet of wheat flour now costs Sh120, up from Sh115. Mombasa-Malindi fare is now Sh450 from Sh300, with matatu town services having increased fares by between Sh10 and Sh20.

Major hotels in Vihiga County have started notifying their customers of a planned increase in food prices owing to the new taxes.

They have also warned of intended lay off of staff to cut on operational costs.

For instance, Sosa Cottages — a posh hotel in the county — has already placed a notice alerting its customers that food prices will go up effective November 1.

The notice reads: "Due to changes in market prices, our prices will increase effective 1st November, 2018. We appreciate your patronage. Thank you."

SUGAR

While noting that this will hit customers and staff hard, Mr Bruce Madete — the proprietor of Sosa Cottages — said the decision to increase prices was reached to cushion the hotel from the increased market prices.

"We want to strike a balance so as not to overburden our customers. Our food prices will rise by between 20 and 30 percent," Mr Madete said.

His sentiments are shared by Mr Henry Asava, the proprietor of Hemara Motel, in Chavakali.

"We are weighing the situation and definitely we will notify our customers of changes in food prices soon. To cut on operational costs, we will have to cut down on the number of staff too,” Mr Asava said.

A spot check showed most retailers and major supermarkets in the county had adjusted prices of food items upwards.

A kilo of packaged rice is going for Sh220 (even more depending on the brand), while local sugar is being sold for Sh200 per kilo. Branded sugar, however, costs Sh250 per kilo.

TUSKYS

In Kisii Town, the situation is not different, with a 90kg sack of Irish potatoes increasing from Sh3,500 to Sh6,500.

However, the same sack of maize has reduced from Sh4,000 to Sh2,000 as farmers had a good harvest this season.

“The price of Irish potatoes has increased since matatu operators doubled fare prices as we import them from neighbouring counties,” Ms Eveline Isanda, a vendor, said.

In Kisumu, the Nation established that the price of basic commodities had not changed since the new levy took effect.

At Tuskys Lolwe, a litre of cooking oil costs between Sh180 and Sh200, while a 2kg packet of sugar costs between Sh285 and Sh295. Maize flour is retailing below Sh80, depending on the type.

Reports by Gaitano Pessa, Shaban Makokha, Victor Otieno, Derick Luvega, Benson Ayienda, Fadhili Fredrick, Wachira Mwangi, Gitonga Marete, Diana Kimanzi, Steve Njuguna and John Njoroge.