Transporters to Increase Charges Day After Fuel Prices Hiked

Trucks held up at a traffic snarl-up along a highway.
Trucks held up at a traffic snarl-up along a highway.

The Kenya Transporters Association (KTA) has asked its members to increase cargo transportation charges following a rise in fuel prices.

In a statement, the association asked its members to hike the charges by at least five per cent, just a day after the Energy and Petroleum Regulatory Authority (EPRA) announced a Ksh5 per litre increase in the price of petrol and diesel.

In the announcement, KTA indicated that the profit margins are way too low and cannot sustain the businesses and that its members have no choice but to transfer the increase in fuel prices to the cargo owners.

"KTA wishes to advise transporters countrywide to increase their transport rates by a minimum of 5 per cent to sustain their businesses under the current circumstances and to circumvent a total collapse of their ventures.

Long distance truck drivers line up before crossing into Uganda.
File image of long-distance truck drivers lining up in Busia County before crossing into Uganda.

"Transport rates have remained constant from the period when the diesel pump prices (Mombasa) were between Ksh75-80 per litre compared to the current Ksh108-110 per litre," the association stated.

KTA further noted that fuel costs contribute up to 35 per cent of the total direct transport costs and indirectly affects other costs such as tyres and spare parts.

The pronouncement by KTA comes just a day after EPRA released a monthly review of the fuel prices. The energy regulator noted that the cost of Super petrol and diesel would each increase by Ksh5 from Tuesday, March 15 to April 14.

Super petrol will retail at Ksh134.72  per litre while diesel will go for Ksh115.60 at pump prices and Kerosene prices remained unchanged at Ksh103.54 in Nairobi and its environs. 

In the new prices, the government had implemented a Ksh20 subsidy per litre, cushioning Kenyans from high rates. Were it not for the subsidy, the prices would be Ksh155.11 for petrol, Ksh143.16 for diesel and Ksh130.44 for diesel.

The landing costs of petrol, diesel and kerosene range between Ksh71 and Ksh78 per litre, with several taxes and levies pushing them to almost double.

The excise duty, road maintenance levy, petroleum development levy, petroleum regulatory levy, railway development levy, anti-adulteration levy, merchant shipping levy, import declaration fee and value-added tax (VAT) are the main costs pushing the prices up.

A photo of a petrol attendant fueling a car on February 2020.

For instance, the landing cost of petrol is Ksh78.14. It attracts distribution and storage costs of Ksh3.35 and taxes and levies totalling Ksh59.71. However, a price stabilisation deficit of Ksh6.48 is subtracted from the costs to bring it down to Ksh134.72. 

The increase in the cost of fuel prices will further dent the pockets of Kenyans who are already feeling the economic effects of the pandemic that ravaged the world, bringing businesses to their knees and forcing others to shut down.