Fuel Costs Continue To Squeeze Kenyans As Cost of Living Keeps Rising

Kenya’s cost of living crept up again, undoing the slight easing seen the month before, as stubbornly high transport costs kept working their way through the economy.

Behind the numbers is a familiar story for many households: pricier transport, a mixed bag on food, and housing costs that just won’t quit

Annual inflation rose to 6.5 percent in July, up marginally from 6.4 percent in June, according to the Kenya National Bureau of Statistics, though still a touch below May’s 6.7 percent.

Month-on-month, prices ticked up 0.2 percent, with the Consumer Price Index moving from 154.91 in June to 155.20 in July.

In practical terms, that means the basket of everyday goods and services Kenyans rely on cost more than it did a year ago, even though food inflation actually slowed a little during the month.

KNBS pointed to three culprits driving the increase: food and non-alcoholic beverages, up 9.0 percent; transport, up a steep 15.6 percent; and housing, water, electricity, gas and other fuels, up 3.2 percent.

Together, these three categories make up more than 57 percent of what’s tracked in the inflation basket, according to KNBS director general Macdonald Obudho.

Transport remains the biggest headache. Pump prices for petrol and diesel didn’t actually move in July, holding steady at Sh214.95 and Sh224.04 per litre. But compare that to a year ago and the gap is stark: diesel is up nearly 30 percent, petrol almost 15 percent.

Matatu and bus fares have followed suit, rising 16.8 percent over the same period, as expensive fuel keeps pushing up the cost of moving people and goods around the country, and that, in turn, is feeding into everything from manufacturing to retail.

Food told a more mixed story. Tomato prices actually fell 3.7 percent from June, and shoppers also caught a break on carrots, down 3.6 percent, and sifted maize flour, down 1.6 percent.

But potatoes climbed 2.1 percent, mangoes jumped 3.2 percent, and both beef and kale got pricier too. Add it all up, and food still cost 9.0 percent more than it did a year earlier.

Housing didn’t offer much relief either. The one bright spot was cooking gas; a 13-kilogram LPG refill dropped 1.1 percent, but electricity more than cancelled that out. Households using 50 kilowatt-hours saw tariffs rise 3.5 percent, while those consuming 200 kilowatt-hours paid 3.1 percent more. Rents crept up too, if only slightly.

Elsewhere, the increases were gentler; health, clothing, restaurants, education and household goods all rose somewhere between two and three per cent. Communication was the outlier, staying almost flat at just 0.6 percent annually.

Dig beneath the headline figure, though, and the pressure becomes clearer. Core inflation, which strips out volatile items like unprocessed food and energy, edged up to 3.2 percent in July from 3.1 percent in June.

That’s a modest shift. Non-core inflation tells a different story altogether, sitting at a stubborn 15.0 percent, a sign of just how much food and fuel are still driving the pain at the till.

“Food and non-alcoholic beverages contributed the largest share of overall inflation at 2.6 percentage points, followed by transport at 1.5 percentage points, underscoring the dominant role played by fuel-related costs in driving inflation,” KNBS noted in its July report.

Taken together, the numbers suggest Kenya’s inflation may have cooled somewhat since peaking in May, but that’s cold comfort for households and businesses still grappling with fuel-driven price increases across nearly every corner of the economy.

Read Also: A Look At Prices Of Popular Wheat Flour Across Kenyan Supermarkets