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Cost of living eases in December as cost of cooking gas drops

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A cooking gas outlet. Inflation eased to 6.35 per cent in December even as food, fuel and electricity prices continued to increase amid a drop in cooking gas costs. PHOTO | FILE

Inflation eased to 6.35 per cent in December even as food, fuel and electricity prices continued to increase amid a drop in cooking gas costs.

Kenya National Bureau of Statistics (KNBS) data shows that inflation dropped from a nine-month high of 6.68 per cent in November.

Homes got further relief in December from cheaper cooking gas prices which have been falling due to lower global crude prices, from which the gas is extracted,  and the removal of value added tax (VAT) in July.

Refilling a 13-kg gas cylinder cost an average of Sh1,983 in December, down from Sh1,987 a month earlier and Sh2,369 in December last year — representing savings of Sh386 for homes over the past one year.

But the food prices rally continued, piling pressure on homes.

“Between November and December food and non-alcoholic drinks’ index increased by 1.31 per cent. This was attributed to an increase in prices of several food items which outweighed the decreases of others,” the KNBS said.

The KNBS data shows that beef was up Sh2 on average to Sh402 a kilogramme in December, a kilo of cabbages rose by Sh5 to Sh67 while sugar was up Sh3 to an average of Sh131 a kilo.

Food takes up the largest share (36 per cent) of the basket of goods that is used to calculate inflation, making it the main driver of the cost of living.

Motorists also had to contend with rising petroleum prices after the energy regulator adjusted prices upwards mid-December on recovering global oil prices. Diesel, which is used to run buses and trucks, on average rose by Sh5 to Sh88 a litre while petrol was up by an average of Sh3 to Sh95 a litre, the bureau data shows.

This pushed up fares during the festive period. Power bills also rose in the review period due to an increase in the fuel cost levy as a result of increased use of expensive diesel-generated electricity, rising to Sh2.85 per kilowatt hour (kWh) in December from Sh2.34 a unit a month earlier.

Homes consuming 200 kilowatt hours (kWh) monthly paid Sh3,497, up from Sh3,378 in November, while users of 50 units paid Sh558 from Sh529.

Costly power is often an inflation driver in the economy given the pivotal role that electricity plays in the manufacture of goods and impact on household budgets.

At 6.47 per cent, the October inflation was within the Central Bank of Kenya (CBK) preferred range of between 2.5 per cent and 7.5 per cent.