TOUGH TIMES

Food and fuel prices push up March cost of living

The month-to-month food and non-alcoholic beverages Index increased by 1.49 per cent between February and March.

In Summary

•Between March 2021 and March 2022, prices of furnishings, household equipment and routine household maintenance also went up (6.44 per cent), housing, water, electricity, gas and other fuels (4.91 per cent), and transport (3.66 per cent).

•The month-to-month food and non-alcoholic beverages Index increased by 1.49 per cent between February and March.

A display of tomatoes at Kangemi Market
A display of tomatoes at Kangemi Market
Image: MERCY MUMO

Kenyans dug deeper into their pockets to meet the cost of basic commodities  in March as inflation rose to 5.56 per cent due to high commodity prices, according to latest official data.

Inflation, a measure of the rate of rising prices of goods and services in an economy, was recorded at a lower rate of 5.08 in February.

In the last 30 days, the prices of cooking oil, wheat flour and tomatoes increased by 6.50, 4.47 and 4.22 per cent respectively.

During the same period, prices of green grams, carrots and oranges decreased by 0.97, 0.69 and 0.49 per cent, respectively.

The price of cooking gas rose by 7.76 per cent between February and March as various brands raised prices by almost Sh1,000 since January last year.

A six kilogramme cylinder is now refilled at Sh1,560 from Sh1,441 up from Sh1,243 before the introduction of VAT. 

The price of petrol and diesel rose by 3.83 per cent and 4.49 per cent, respectively pushing a litre of super petrol to Sh134. 72 in Nairobi up from Sh129. 72 while diesel now retails at  Sh115. 60 from Sh110.

Kenya National Bureau of Statistics (KNBS) data shows the rise was mainly due to an increase in the price of food and non-alcoholic beverages which went up by 9.92 per cent.

Prices of furnishings, household equipment and routine household maintenance also went up (6.44 per cent), housing, water, electricity, gas and other fuels (4.91 per cent), and transport (3.66 per cent).

The Consumer Price Index (CPI), a measurement of the percentage change in the price of a basket of goods and services consumed by households, increased by 0.85 per cent from 119.129 in February to 120.139 in March.

The beverages index increased by 1.49 per cent between February and March mainly driven by a price increase of most of the food items, which outweighed the gains made in prices of others.

Overall, prices of food items in March 2022 were relatively high compared with prices of food items recorded in March 2021.

A steep rise in prices of bar soap and detergents, among other items between February and March led to the increase in the cost of furnishings and household equipment index,  by 1.36 per cent 

The housing, water, electricity, gas and other fuels’ index marginally increased by 0.71 per cent in the period under review.

Yesterday, financial consulting firm, Ernst & Young projected the country's inflation to hit 6.9 by the end of the year with the general election and geopolitics in play.

''The cost of living is expected to rise further until the end of August, with election induced inflation, depreciating shilling and ongoing volatility in the global marketplace pilling pressure on the already tough situation,'' Partner and lead tax expert at Ernst & Young Francis Kamau said. 

The war between Russia and Ukraine that began in February has caused a disruption in the supply chains of commodities such as wheat and gains as Kenya is a net importer from the two countries.  

Millers have warned of an imminent price jump on wheat flour following a rise in global wheat prices which have shot up from $345 (about Sh39, 295) per tonne to $460 (Sh52,394 ) per tonne over the last four days.

There has been an effect on oil prices too. At the beginning of March, a barrel traded at $100 the highest since the financial crisis of 2008 when it was $140.

This is likely to impact April's fuel review by the Energy Regulatory Authority unless the government continues to subsidies the cost of fuel.

On Wednesday, Central Bank governor Patrick Njoroge played down the rising cost of living, saying that inflation is still well anchored below the government's target of 7.5 percent.