Transport

Tougher times for consumers as high transport costs kick in

trucks

Transport trucks parked by the roadside in Kikopey, Gilgil. PHOTO | BEATRICE OBWOCHA | NMG

Kenyans are staring at tougher times as truckers announce a 5 percent increase in transport costs in the wake of a rise in fuel prices announced on Monday.

The Kenya Transporters Association (KTA) announced immediate increase in transport charges starting Tuesday after the Energy and Petroleum Regulatory Authority (EPRA) announced a 10-year high fuel price in its latest monthly review.

KTA chairperson Newton Wang’oo said fuel contributes up to 35 percent of total direct transport costs and indirectly affects other costs such as for tyres and spare parts since they are all imported.

Mr Wang’oo said transport charges have remained constant from the period when the diesel pump prices in Mombasa were between Sh75 and Sh80 per litre compared to the current Sh108-110 per litre.

“Transporters’ margins can no longer sustain any increase in costs and regrettably have to pass on the increase to the cargo owner for road transport sector to survive,” Mr Wang’oo said.

“KTA wishes to advise transporters countrywide to increase their transport rates by a minimum of 5 percent to sustain their businesses under current circumstances and to circumvent a total collapse of their businesses.”

Abdul Mahamud, a Mombasa transporter who owns 11 trucks operating across East African countries, said he is now forced to fuel in the neighbouring countries where prices are comparatively lower.

“I ferry goods to Tanzania and Uganda. I have no otherwise but to fuel my trucks in such countries to ensure the fuel is enough to makes round trip so as to mimimise transportation cost,” said Mr Mahamud.

“As much as the government thinks it will collect adequate tax ( by increasing fuel cost), it will only work for those in local logistic sector who are not heavy fuel consumers. But for us who do cross border trade, we will be hit hard.”

On Monday, EPRA increased fuel prices with a litre of petrol going up by 4 percent to Sh134.72 in Nairobi, while diesel prices jumped 4.5 percent to Sh115.60 per litre from while prices of kerosene remained unchanged.

The prices are inclusive of the eight percent value-added tax (VAT) in line with the provisions of the Finance Act, 2018, the Tax Laws (Amendment) Act, 2020, and the revised rates for excise duty adjusted for inflation as per Legal Notice No. 194 of 2020.

The higher fuel prices are expected to inflate costs of food, transport, electricity generation and manufacturing.

Increase of fuel prices will also affect manufacturers who use diesel to run their factories. The manufacturers will in turn pass operational expenses to consumers.

High prices last year forced the state to introduce a subsidy scheme in October to diffuse public outrage over the high cost of living.

The fuel subsidy scheme which is supported by billions of shillings raised from consumers through the Petroleum Development Levy had kept pump prices unchanged for five months.

The regulator had maintained fuel prices unchanged since October at Sh129.72 and Sh110.60 a litre for petrol and diesel respectively on fears an upward review could fuel public anger.

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