Flat oil prices ease cost of living for the first time in seven months
The cost living has eased for the first time since October last year with the rate of inflation dropping marginally to 5.76 per cent in April from a higher 5.9 per cent in March, latest data from the Kenya National Bureau of Statistics shows.
The cool down in inflation is attributable to the hold on fuel cost increments in mid-April by the Energy and Petroleum Regulatory Authority, a move that left fuel costs unchanged to May 14.
Rising food costs nevertheless continue to grow unchecked with food inflation soaring by 6.42 per cent on a year-by-year basis in April.
The month to month food and non-alcoholic drinks’ index surged marginally by 1.73 per cent between March and April.
This food inflation was mainly attributed to an upswing in prices of some food items, which offset the decrease in prices of other foods.
Read also: Oil marketers’ margins cut as regulator keeps pump prices unchanged
For instance, the prices of tomatoes, cabbages and potatoes went up by 8.50, 5.68 and 3.85 per cent, respectively as the prices of sugar and oranges decreased by 0.56 per cent and 0.06 per cent, respectively.
The housing, water, electricity, gas and other fuels’ index, increased by 0.38 per cent between March and April.
The rise was mainly attributed to an increase in the prices of charcoal and house rent for a one-bedroom unit by 1.83 per cent and 0.05 per cent, respectively.
The revision to fuel prices announced in mid- April were cancelled providing a benefit to transport index, which has had a significant impact in the recent past.
Mid-April, a last minute decision, which kept the prices of fuel unchanged until May 14, saw the oil suppliers’ margin that has been controlled by the State since 2010 cut, with an offer of about KES1.7 billion in compensations, Business Daily quoted a National Treasury official.
The marketers’ margin for super petrol was slashed to KES7.95 from KES12.39 per litre, representing KES4.44 drop.
Diesel margin was revised downwards by KES2.28 to KES10.08 per litre while that of Kerosene was adjusted to KES8.89 from KES12.36.
“We made a late decision to cut the suppliers’ margin and offer millions of motorists a relief. This was more of a political decision than an economic one because public anger has been mounting,” a Ministry of Energy official, who requested not to be identified given the sensitivity of the matter was quoted by Business Daily.