Kenyans brace for tougher times as fuel prices rise

Kenyans will beginning Friday pay a record price for roads, setting off a chain of price hikes on basic commodities.

The move will also slash the incomes of thousands.

Fuel prices jumped by up to 13 per cent Wednesday in the single largest price hike in history upon implementation of the additional Road Maintenance Levy (RML) that is now at Sh18 per litre.

"This will obviously affect the price of essential products like bread and unga," said Pradeep Paunrana, the chairman of the Kenya Association of Manufacturers.

Transport costs arising from the new diesel prices will rise by at least five per cent, in the estimates of Mr Paunrana – who is also the managing director of ARM Cement and Mea Fertilisers.

"Manufacturing costs will rise by at least one per cent – which is quite significant," he added, citing that higher diesel prices automatically translate to costlier electricity.

The Energy Regulatory Commission (ERC) announced the new fuel prices late Wednesday, with the biggest increment arising from an additional Sh6 per litre as RML.

"In this month's review, the commission has factored Sh6 per litre in additional RML for both super petrol and diesel," ERC Director General Joseph Ng'ang'a said in the pricing review that takes effect at mid-night.

The levy that is collected and managed by the Kenya Roads Board has doubled to Sh18 in just two years, on the justification of improving the road network.

Until June last year, the levy was only Sh9 a litre before the two consecutive hikes of Sh3 and Sh6.

For matatu crew like Moses Njeru, who plies Nairobi's Uthiru route, the increase means his daily wages have been cut by nearly Sh500 – because his employer would never reduce his target of Sh8,000 at the end of the day.

Consumer pains arising from the expensive roads will be felt across the nation - even in regions that do not have a road network.

All households will take a huge hit from the pricing review, directly through bigger electricity prices, and indirectly through costlier manufactured goods which still have to be transported using dearer diesel to the consumers.

Wednesday, Kenya Power confirmed that the country still relies partly on electricity generated from diesel-powered plants. Diesel is the most expensive source of all electricity, and its costs are spread to consumers.