Transport Sector to Increase Costs by 5% Due to Hike in Fuel Prices

Following the government’s decision to increase fuel prices by 5 shillings on Monday 14, the Kenya Transporters Association (KTA) has urged transporters to up their transport rates by a minimum of 5 percent.

The move, says KTA, is in response to the recent increase in fuel landed costs and the depreciation of the Kenyan shilling.

Fuel costs in the transport sector contribute up to 35 percent of total direct transport costs. It indirectly affects the costs of other items such as spare parts and tyres since they are all imported.

Transport rates have remained constant from the period when the diesel pump prices were between 75 and 80 shillings per liter compared to the current prices of between 108 and 110 shillings.

On March 14, the Energy Petrol and Regulatory Authority (EPRA) announced new fuel prices where the price of Super Petrol and Diesel were adjusted upwards by 5 shillings.

With the new adjustment, KTA says that transporters margins can no longer sustain any increase in the costs and regrettably, this cost will be passed on to the cargo owners for the road transport to survive.

“KTA wishes to advise transporters countrywide to increase their transport costs by a minimum of 5 percent to sustain their business under the current circumstances and to circumvent a total collapse of their businesses,” the Board said in a notice.

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The increases in fuel prices come on the back of the ongoing conflict in Ukraine, which has destabilized global markets.

Here is the full statement:

According to the Central Bank of Kenya, global diesel and other middle distillates have fallen to the lowest seasonal level since 2008.

Similar shortages of these transport and industrial fuels helped propel oil prices to a record high due to the ongoing Russia-Ukraine war. As a result, transport companies are forking out more at fuel pumps to fill their tank.

Kenyans, who are already choked by the increased food prices, now have to deal with the soaring fuel prices and a further rise to the food bills.

Considering how vital this commodity is in Kenyan households, we cannot start to imagine how that pressure could affect the pocket of the ordinary Kenyan.

Although the global energy crisis has quickly become acute, we cannot control the war in Ukraine nor the continued volatility of fuel prices. Still, we can take steps to reduce the impact on Kenyan families.

Unfortunately, our country is too focused on politics to hear the cries of the vulnerable Kenyans.