Edible Oil Manufacturers Decry Import Duty Imposed On Crude Oil

Nairobi, Kenya, Jul 4 – Cooking oil manufacturers in Kenya have raised concerns about the recent implementation of a 10 percent import duty on raw edible oil. They argue that this move will inevitably lead to significant price hikes for cooking oil, a staple in many Kenyan households.

The Edible Oil Manufacturers Association has highlighted that this new levy, which took effect this month under the East African Community (EAC) Common External Tariff, will not only impact cooking oil prices but also have a ripple effect on the costs of other essential products. They stress that this will add to the financial strain already felt by many Kenyans.

According to the association, the duty increase, published in the EAC Gazette No. 18 on June 30, 2024, comes at a time of widespread public discontent over rising taxes. They are urging the government to consider postponing the implementation of these taxes to protect consumers, particularly the vulnerable, from facing higher prices for essential household items.

The price hikes are expected to affect various types of cooking oils such as refined soybean oil, RDB Palm Olein, Sunflower oil, and refined corn oil. These oils are crucial ingredients in the production of everyday goods like soap, bread, mandazi, chapatis, and margarine. Therefore, higher cooking oil prices will likely lead to increased costs across these product categories.

President William Ruto last week responded to public concerns on increased taxes amidst a high cost of living by withdrawing the Finance Bill 2024, which included the tax hikes, to allow for further dialogue and a collective approach to addressing budgetary needs.

The abrupt introduction of these new taxes, particularly on crude palm oil and other vegetable cooking oils, has sparked protests nationwide. Critics argue that these measures were implemented without sufficient public participation and will exacerbate the financial hardships faced by millions of Kenyans, raising the overall cost of living.

In addition to the immediate economic impacts, cooking oil manufacturers have expressed broader concerns about the ease of doing business in Kenya, saying that annual tax increases make the market less favorable compared to neighboring countries like Egypt, Uganda, and Tanzania, discouraging investment.

The manufacturers also criticized the introduction of an eco-levy of Sh 150 per kilogram  which, had been proposed in the Finance Bill 2024, arguing that it lacks mechanisms to promote environmental conservation through recycling. They warn that such costs will ultimately be passed on to consumers, as alternative packaging like glass is expensive and unsustainable.