Of all the household items that Kenyans use on a daily basis, and somehow cannot do without, cooking oil has had the most volatile prices.
The cost of cooking oil no matter the brand or manufacturer has skyrocketed to almost now Sh400 a litre. Pwani Oil, one of the largest manufacturers, announced it would shut its cooking oil making plant temporarily. The company has blamed the closure on the lack of raw materials, particularly crude palm oil which is imported majorly from Indonesia and Malaysia.
This problem has been compounded by the lack of US dollars in the market that has made it extremely expensive to import products into the country.
This is expected to further push up the cost of cooking oil, which is already out of reach for many Kenyans.
This is the time for the government to step in considering that if left unchecked, cooking oil will become a luxury to millions of Kenyans. We have seen with sugar that a slight increase in prices leads to trade in contraband. The same might be replicated with cooking oil if no quick solution is found.
While Central Bank of Kenya has refused to be an active participant in the forex market—and rightly so—the financial regulator should ensure that the shortages being reported do not result into an economic crisis.
To put it simply, we do not expect CBK to tinker with the market. If refineries such as Pwani Oil have difficulties getting palm oil from the global market because the prices have gone up, it is not the job of CBK to help buy it for them.
However, it is CBK’s job to shield consumers from dramatic price shocks. Already, most of the households are struggling to afford cooking oil, with retail prices more than doubling in the last few months.
Similarly, the government through the National Treasury can waive import duty on raw materials used to manufacture cooking oil as it is always the case with maize whenever there is a shortage and the millers are given a window to buy from other countries.