Kenyans will pay more for paints, resins and shoe polish on increased cost of kerosene, putting pressure on housing and furniture costs.
The imposition of eight per cent value added tax (VAT) and Sh18 adulteration fee per litre of kerosene from September 21 has seen retail price of paraffin jump to Sh108.41, up from Sh84.95.
Crown Paints Kenya #ticker:BERG said the increased prices has led to a 10 per cent rise on their production costs and that it will next week increase paint prices by at least eight per cent.
Paint makers are the biggest consumers of kerosene, which is their key raw material.
“It has very serious impact on our operations and we have no other option but to increase our prices to consumers,” Crown Paints chief executive Rakesh Rao said.
Products which will be affected, Mr Rao said, include gloss paints, roof paints, varnishes and thinner, which is used to clean up surfaces after using oil-based paints.
This is likely to affect investors such as housing developers, furniture makers and Jua Kali artisans who make equipment from scrap metal.
“Manufacturers of paints, resins and shoe polish have been hit with the anti-adulteration levy,” Kenya Association of Manufacturers chair Sachen Gudka said via e-mail.
“By making it more expensive to manufacture these products, this sector becomes less attractive to investors, both foreign and local.”
Kerosene prices have for the first time risen above diesel, which is selling at Sh108.12 a litre.