Manufacturers have come out to explain the exponential rise of the cost of cooking oil.
Speaking to a local media on Monday, December 6, Rajul Malde, the Commercial Director of Pwani Oil, noted that the price change was attributed to a sudden rise in demand of the product.
Malde noted that Kenya imports most of the cooking oil and that there was a shortage of the product in the international market caused by the opening up of global economies post Covid-19 pandemic.
This was caused by suppliers being unable to meet the high demand by consumers, thus pushing the cost of the cooking product upwards.
"There was a sudden surge in demand that the supply countries have felt and because this is purely economics and driven by supply and demand, the commodity prices have continued to go up," he explained.
Malde added that the Kenyan shilling's decimal performance against the US Dollar in the foreign exchange market is also a contributing factor since the dollar is the preferred currency of trade globally.
He noted that US Dollar has not been available in the market due to the current exchange rates. In addition, the cost of commodities is driven by commodity market index which determines the cost of the raw materials.
Manufacturers raised concern over high local conversion costs - the cost of converting the raw material into a finished and packaging for consumption.
According to the Kenya National Bureau of Statistics (KNBS), a litre of cooking oil retailed at Ksh292 in November. This is an increase of Ksh62 since January.
On November 18, Parliament warned Kenyans of contraband cooking oil that might have sneaked into the country. Speaking during an inspection of the Mombasa Container Free Station (CFS), Adan Hajj, the chair of the Parliamentary Committee on Trade expressed concerns that 139 containers of cooking oil unfit for human consumption had found their way into the market.
The oil, which was stored at Mombasa CFS, disappeared under unclear circumstances despite the authorities flagging the containers. Hajj called for the revocation of the CFS’s operating license as the loss amounted to gross negligence.
“We ask the authorities to revoke the license and degazette this particular entity from operating a CFS,” said Hajj.
The Legislator further ordered for the declaration of the facility as a crime scene, urging the Directorate of Criminal Investigations and other customs authorities to immediately launch investigations into the matter.