Plan to Raise Goods Prices Due to Importation Delays
Plan to Raise Goods Prices Due to Importation Delays
Because of the ongoing attacks by the rebel group Houthi on commercial vessels around the Red Sea, local producers want to raise the prices of their goods due to importation delays.Houthi, an organization that supports the Hamas terrorists in Palestine, was charged with destroying ships that they claimed were bound for Israel or had pledged loyalty to the Asian nation led by Prime Minister Benjamin Netanyahu.
The Suez Canal, which is a major and one of the shortest freight routes, has since proven to be a tricky passageway affecting the imporatation of goods for Kenya and other East African countries which fully rely on it. As a result, shipping companies are rerouting or halting the transportation of goods or hike charges, which are passed on to local manufacturers.
Because of this, a number of significant shipping firms, including MSC, Maersk, Hapag-Lloyd, and the French shipping giant CMA CGM, have ceased operations in the Red Sea and have instead chosen to take a longer route that circles the tip of South Africa with their cargo ships.Since ships need at least an additional 10 days to reach their destination, longer routes have also resulted in delays in the delivery of imports.
In an emergency meeting of the UN Security Council on December 29, 2023, UN Assistant Secretary-General Khaled Khiari threatened severe repercussions should the attacks continue. The United Nations “continues to warn against the risk of exacerbating regional tensions and the adverse political, security, economic, and humanitarian repercussions of military escalation in the Red Sea.
“The council further contended that attacks occurred against vessels unrelated to Israel. The nations’ unified statement denouncing the attacks was also released by the White House. Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, Singapore, the Republic of Korea, and the United Kingdom were among them.
“We warn the Houthis against further attacks. Ongoing Houthi attacks in the Red Sea are illegal, unacceptable, and profoundly destabilizing. Attacks on vessels, including commercial vessels, using unmanned aerial vehicles, small boats, and missiles, including the first use of anti-ship ballistic missiles against such vessels, are a direct threat to the freedom of navigation that serves as the bedrock of global trade in one of the world’s most critical waterways.
“We demand that these illegal attacks stop right away and that the crews and vessels being held without authorization be released. Should the Houthis persist in endangering human life, the world economy, and the unhindered flow of trade via the vital waterways in the region, the White House issued a warning. Back home, in November of last year, Energy CS Davis Chirchir issued a warning that the Israel-Hamas conflict may cause fuel prices in Kenya to spike to as high as Ksh300 per litre at one point.
“I read an article in the Financial Times the other day that because of the Hamas and Israeli War, the international prices could go up to USD150, and that would literally mean our products going to a high of Ksh300 at the pump,” CS Chirchir stated while appearing before the National Dialogue Committee (NDC).
Global fuel prices did, however, decline, giving Kenyans optimism that the commodity may trade below the December 2017–January 2018 set rates of Ksh199.05 for kerosene, Ksh201.47 for diesel, and Ksh212.36 for gasoline per litre.On January 14, the Energy and Petroleum Regulatory Authority (EPRA) is anticipated to announce the pump pricing for January through February.
