Manufacturers implore government to halt 10% import duty on crude palm oil

KENYA- The Association of Edible Oil Manufacturers (AEOM) has called on the Kenyan government to halt plans to impose the 10% import duty on crude palm oil as it would cause an increase in cooking oil prices. 

According to the Kenya National Bureau of Statistics (KNBS), a liter of cooking oil retailed at KES 326.36 (US$2.54) per liter as of June 30. The import duty will raise the price to KES 360 (US$2.80).  

The new tax will take effect this month after Kenya’s formal application to the East African Community to raise the import duty was approved by the EAC’s Community Council. 

Kenya joins Uganda in implementing the import duty on the key raw material for cooking oil, various cosmetics, soap, and margarine. AEOM warns that the tariff will increase the prices of these commodities and other consumer goods like bread, further increasing the cost of living for Kenyans. 

AEOM said in a statement, “In view of the ongoing uproar and demonstrations against tax hikes across the country, we call upon the government to urgently seek a stay of execution of this new taxes as this single act will cushion millions of Kenyan consumers, especially the vulnerable ones against imminent significant price hikes for these essential household products.” 

They also faulted the government for not consulting with stakeholders, describing the tariff’s implementation as ‘abrupt.’ They implored the government to consider public participation and implement other revenue-raising policies that would not exacerbate the financial distress currently experienced by Kenyans. 

The government has also imposed a one-year import duty rate of 25% on Refined soybean oil, RDB palm oil, sunflower oil, and refined corn oil.  

AEOM warned that the import duty imposed on vegetable oils will make Kenya an unfavorable investment destination for manufacturing and processing compared to other African countries like Egypt, Ethiopia, and Tanzania. 

The association also faulted the government for the proposed eco-levy, which is contained in the controversial Finance Bill 2024 and is KES 150 (US$1.17). This would force manufacturers to seek alternatives to packaging oil, such as glass, which is not sustainable and expensive.