Diesel and power cost rise highest in December

Diesel and electricity prices shot up to the highest this year, the latest statistics show, piling upward pressure on the cost of basic consumer goods whose production is largely dependent on the two commodities.

Data collated by the Kenya National Bureau of Statistics (KNBS) indicates that Kenyans were paying 16.71 percent more for a litre of diesel in November compared to a year earlier.

The commodity, used to power farm and industrial machines as well as in public transportation, cost an average of Sh108.97 a litre largely on impact of eight per cent value added tax (VAT ) imposed on September 21 compared with Sh93.37 a year ago.

Fares have gone up

Households consuming 200 units of electricity paid Sh4,434.48 in November, representing a 12.63 percent increment compared with 12 months before.

Fares have also gone up by more than 10 percent this year, hitting hardest commuters in the major towns, who depend on public transport to travel to and from work daily.

Passengers parted with 10.59 percent more in transport charges to commute to and from their homes to work in Nairobi and other towns, while commuting within a distance of 250 kilometres cost 7.69 percent more on average in November.

KNBS data shows that matatus and city buses charged residents an average of Sh49.84 in November compared with Sh45.07 the year before. Those travelling outside the towns paid an average of Sh431 for a distance of 250 kilometres from Sh400.21 in November 2017.

VAT on petroleum

Fares in Nairobi went up following the implementation of the eight percent value added tax (VAT) on petroleum products, coupled with the increased cost of complying with stringent traffic rules this month, which has seen a slight drop in the number of buses on some routes.

The continued fall in global brent (crude) prices to a 15-month low last Thursday has, however, offered some hope of a possible larger dip in the diesel price in the next monthly review from January 15 than the slight Sh0.55 reduction mid-December.

It has, however, not been all gloom for the consumers with the cost for a kilogramme of maize flour, sugar and beans falling by 30.64 percent, 7.54 percent and 7.05 percent, respectively. This has been attributed to improved weather, which boosted agricultural production.