COST OF LIVING

Tougher times ahead for households as global fuel prices soar

In Summary
  • Traders passing the high import and transport bill to consumers
  • This is further worsened by the ongoing inflow of locusts that have destroyed late harvest in Eastern Kenya
Tomatoes on sale at Kangemi Market
Tomatoes on sale at Kangemi Market
Image: MERCY MUMO

Subdued household revenue pushed families to the edge in February, with the cost of living rising to 5.8 per cent in February compared to 5.7 per cent in January.

This is expected to escalate further as global fuel prices continue to soar, with traders passing the high import and transport bill to consumers. 

International oil prices increased further during the week, largely reflecting the ongoing global supply cuts.

The latest review by the Energy and Petroleum Regulatory Authority pushed petrol prices by Sh8.19 per litre in Kenya while that of diesel and kerosene went up by Sh5.51 and Sh5.32.

Murban oil price increased to $66.53 per barrel on Wednesday from $64.57 per barrel last week. 

According to the Kenya National Bureau of Standards, the higher cost of living was driven by the month-on-month food and non-alcoholic drinks index, which increased by 100 basis points between January and February.

Last week, the Strategic Food Reserve said it fears that the country might face food shortages in the coming months as evidenced by the sharp demand for food against high prices of farm produce.

This is further worsened by the ongoing inflow of locusts that have destroyed late harvest in Eastern Kenya. 

Last week, the Strategic Food Reserve said it fears that the country might face food shortages in the coming months as evidenced by the sharp demand for food against high prices of farm produce.

The Food and Agriculture Organization has already warned that this wave will be bigger and deadlier than the last.

According to Agriculture CS Peter Munya, 15 out of 47 counties in Kenya have been affected by the waves of locusts coming into the country from Ethiopia and Somalia.

According to the FAO, as many as 80 million locusts can be found in each square kilometre of a swarm, with a small swam consuming the same amount of food in one day as approximately 35,000 people, 20 camels, or six elephants.

On Wednesday, Stanbic Bank announced a drop in the monthly private sector performance index in February on low demand, reflecting muted cash flow in different parts of the economy.

Slower sales growth was often related by panelists to a lack of cash flow in some parts of the economy, leading to reduced customer spending and travel.

The monthly  Stanbic Performing Managers Index dropped to 50.9 down from 53.2 in January, the weakest rate of improvement since Covid-19 hit the country.

Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show a deterioration.