Category: Business Daily

The High Court has sided with a German multinational engineering firm caught in a Sh1.9billion fight with Kenya Revenue Authority (KRA) over a delayed tax relief document.

The court said it was improper for the taxman to punish HP Gauff Ingenieure GmbH and Co. KG for administrative lapses in processing a tax exemption certificate.

While setting aside KRA’s decision to deny HP Gauff VAT relief of Sh526,022,967-a decision previously upheld by the Tax Appeals Tribunal-the High Court found that the Treasury Cabinet Secretary had failed to act on the firm’s request for a tax exemption certificate. It was, therefore, unjust to penalise the company for a government administrative omission.

‘It is my finding that the tribunal erred in allowing the administrative failure of the relevant ministries and the respondent (KRA) to prejudice the appellant’s (HP Gauff’s) established right to remission, effectively punishing the appellant for the government’s failure to finalise internal procedures,’ said the High Court in a ruling handed on October 23, 2025.

HP Gauff Ingenieure GmbH and Co. KG, which provides consultancy and engineering services mainly in the infrastructure sector, moved to the Tax Appeals Tribunal on August 21, 2020, after the KRA declined to grant it tax relief on projects funded by official donors.

The four main projects that are subject to the audit include the Kisumu-Kakamega Road, Merille-Marsabit Road, MRTS Jogoo corridor, and Nakuru Loruk-Marich road.

Under Kenya’s framework, Official Aid-Funded Programmes (OAFPs) may be approved by the Treasury Cabinet Secretary to exempt such projects from the 16 percent VAT, as a sweetener to attract cheaper loans from development finance institutions such as the World Bank and the African Development Bank.

Sufficient time

The KRA argued it rejected HP Gauff’s request for VAT relief-amounting to Sh526,022,967-because the firm failed to produce the requisite tax exemption certificates despite being given sufficient time.

The taxman also demanded corporate income tax of Sh1.24 billion, noting that the income earned from the projects was not exempt. It also demanded that the German firm pay-as-you-earn (PAYE) of Sh189,339,257, bringing the total tax claim to about Sh1.9 billion.

On corporate income tax and PAYE, the court faulted the tribunal for not addressing the issues that the German firm had raised, including challenging KRA’s decision to tax income from a water supply project located in South Sudan.

The firm also disputed KRA’s benchmarking of expatriate pay as well as its decision to reject its tax-free subsistence allowances.

The taxman said benchmarking was warranted because the reported salaries seemed low and the company failed to provide contracts for the foreign employees.

The taxman added that the firm did not qualify as a ‘regional office’ under the Income Tax Act, so the rule allowing regional directors and expatriates to exclude one-third of their pay from taxation did not apply.

However, the court noted that the tribunal ‘made no findings on these material questions’.

‘It did not refer to the evidence presented, such as the Shared Services Agreement or the Transfer Pricing Policy. It did not interpret the relevant sections of the Income Tax Act,’ the court said, while setting aside the decision to uphold the assessment on corporate income tax and Paye, sending it back for a fresh hearing.

‘Instead, it upheld the entirety of the Sh1.9 billion assessment based on a rationale that could, at best, only apply to the VAT portion of the dispute. This is a manifest error of law.’

Earnings from tea exports to India surged by nearly three quarters in the first half of 2025, overtaking industrial carbonates, or soda ash, to become the country’s top export to Asia’s third-largest economy.

India bought tea valued Sh1.97 billion between January and June 2025, data collated by the Kenya National Bureau of Statistics (KNBS) shows, a 73.4 percent jump over Sh1.14 billion in the same period of 2024.

Shipments of Kenyan tea to India increased by 65.89 percent in volume to 7.83 million kilogrammes in the review period from 4.72 million kilogrammes a year earlier

The jump saw tea dethrone carbonates and percarbonates, or simply soda ash, whose exports to India fell by 24.4 percent to Sh916.98 million from Sh1.21 billion a year earlier.

Volumes of the chemical exports, mainly disodium carbonate used in glass and detergents manufacturing, dropped to 31.17 million kilogrammes from 34.21 million kilogrammes.

India is one of the markets which has in the past been listed by Kenya Export Promotion and Branding Agency (Keproba) as difficult to penetrate.

‘We realise the Indian market has risen in terms of sophistication and even the demand must correspond to needs of the niches in the market. We are marketing key products into the market by developing a targeted IMC (Integrated marketing communications) plan,’ Keproba told the Business Daily in a past emailed response.

Besides tea and soda ash, Kenya’s exports to India include pigeon peas and coffee.

The bump in exports to India comes against the backdrop of a sector-wide downturn amid global tea prices slump which eroded earnings for farmers.

KNBS data show that total tea export earnings fell by 13.41 percent in the first half of 2025 to Sh176.76 billion from a record Sh204.14 billion the previous year – the first decline since the 2017/18 fiscal year.

The setback has rippled through the value chain, dealing a heavy blow to hundreds of thousands of smallholder farmers who rely on the crop as their main source of income.

Farmers affiliated with the Kenya Tea Development Agency (KTDA), for instance, earned between Sh0.80 and Sh19.10 less per kilogramme of green leaf in second payments – the annual bonus – during the year to June 2025 compared with the previous cycle.

KTDA blamed the reduced payouts on the strengthening of the shilling, which averaged Sh129 to the US dollar, compared with Sh144 the year before, wiping out an estimated Sh15 for every dollar earned.

‘The drop in tea prices was largely driven by huge tea stocks that had built up during the reserve price window, which was only removed in October 2024,’ KTDA said via email mid-October.

‘Geopolitical challenges and instability in key markets such as Pakistan, Russia, Sudan and Iran also affected demand, though the situation has now slightly stabilised.’

The pain for smallholder farmers was compounded by a drop in demand from Pakistan, Kenya’s largest tea market. KNBS data show that Pakistan – which accounts for about 40 percent of total exports – slashed its imports by 12.96 percent, with earnings from the destination falling to Sh74.01 billion in the first half from Sh85.03 billion the year before.

This marked the first drop in tea exports to Pakistan since the 2018/19 financial year when earnings from the South Asian nation fell by nearly 25 percent.

KTDA data show that average prices per kilogramme of made tea fell across all major producing regions – from Sh385 in 2023/24 to Sh322 in 2024/25. In Central Kenya, farmers in Kiambu earned Sh371, down Sh46, while those in Murang’a and Nyeri fetched Sh376 and Sh388, down Sh42 each.

The steepest declines were in the Rift Valley and Western regions: Kericho farmers earned Sh245, down Sh101, Bomet Sh209 (down Sh85), and Nyamira Sh266 (down Sh106).

With the rising popularity of crypto transactions and recent legislative developments in Kenya, a recognised leader in mobile money, the question of tax treatment of digital assets has become increasingly relevant. Should digital assets be subject to both Excise and Value Added Tax (vat)? The answer is far from clear.

Kenya has not had specific regulations for crypto assets for a while, with regulatory issues and related activities being addressed based on existing frameworks and in line with the mandates of the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK).

However, the CMA and the CBK’s rulemaking in crypto-assets or digital assets has thus far remained limited, and no formal instruments that specifically or expressly cover digital assets had been issued by either institution.

That said, the government recently introduced the Virtual Asset Service Providers (VASP) Act, 2025, establishing a regulatory framework for VASPs and addressing risks linked to the misuse of virtual asset services

According to Chainalysis, a US-based firm, Kenyans carried out transactions valued Sh426.4 billion ($3.3 billion) in stablecoins in the year up to June 2024, highlighting the increasing integration of virtual assets into economic activities.

Against this backdrop, understanding the tax and regulatory implications requires examining the key categories of virtual asset services operating in Kenya.

These include peer-to-peer exchanges, which enable fiat-to-crypto conversions; custodial services which help users safeguard private keys; and NFT marketplaces, which facilitate the creation and exchange of digital collectibles and art. These roles demand tailored regulation and taxation that reflect the distinct functions of digital assets.

Accordingly, Kenya’s legislative response signals a pivotal shift in the regulatory and fiscal landscape. Through the Finance Act 2025, the government repealed the 3 percent Digital Asset Tax (DAT) on gross transaction value and introduced a 10 percent Excise Duty (Excise) on fees charged by VASPs.

Under the Excise Duty Act (EDA), fees charged by VASPs on virtual asset transactions are subject to Excise at a rate of 10 percent of the excisable value.

This shift from the repealed DAT to Excise reflects a more targeted and administratively efficient approach, focusing on transaction fees rather than the gross value of digital asset transactions.

By taxing the fees instead of the entire transaction amount, the government preserves revenue while reducing economic distortions associated with taxing gross transaction values.

While the imposition of Excise on virtual asset transactions is explicit under the EDA, the same certainty does not apply to VAT. Under the Value Added Tax Act (VAT Act), VAT is chargeable on any taxable supply unless it is specifically listed as exempt under the First Schedule or zero-rated under the Second Schedule.

Virtual asset services are not included in these exemptions, raising a critical question: Are fees charged by Virtual Asset Service Providers (VASPs) subject to VAT?

This ambiguity is compounded by the similarity between VASP services and traditional financial services. The First Schedule to the Virtual Asset Act outlines the types of virtual asset services and their functions, including custodial wallet services, transfer and conversion services, trading, settlement platforms, payment gateways, and brokerage functions.

From the foregoing, the services offered by VASPs are akin to those provided by traditional financial institutions. Notably, Part II of the First Schedule to the VAT Act exempts certain financial services from VAT.

However, it does not specifically include services offered by VASPs, creating uncertainty around their VAT treatment despite their functional alignment with conventional financial services.

The current lack of clarity on how to tax virtual asset transactions is bound to give rise to tax disputes between VASPs and the tax authority.

Applying both Excise and VAT on these services creates an unfair tax environment, as cryptocurrencies are increasingly used as a medium of payment similar to other financial services exempt from VAT.

Best international practice offers useful guidance and provides clarity on where ambiguity exists. For instance, the European Union, Australia, the United Kingdom, and Singapore treat virtual assets activities, including bitcoin, akin to financial services and means of payment, thus exempting them from VAT.

This not only reduces compliance complexity but also lowers incidences of tax disputes and reduces transaction costs in the digital economy.

Building on these lessons, a clear and forward-looking policy framework is essential for Kenya. As such, policymakers should work closely with industry stakeholders to develop legislation that encourages innovation while safeguarding revenue.

Finally, the taxation regime for virtual assets must be clear and well-defined to reflect the country’s approach to fostering innovation, position Kenya as a competitive digital hub, and enhance compliance with tax regulations.

Travel and trade are crucial change agents in society, government and technology. The introduction of artificial intelligence (AI) is fundamentally altering how we travel and trade.

By utilising AI’s capabilities, the aviation sector is on the verge of massive disruptive changes that will present new opportunities and risks.

Using machine learning, predictive analytics and natural language processing, AI has the potential to revolutionise how institutions operate generally, but specifically by opening new avenues for customer service, risk management, business and travel advice.

For example, AI chatbots (computer programs designed to simulate conversations with human users, either through text or voice) and virtual helpers help with customer service around the clock, simplifying user interfaces and making it easier to answer questions quickly.

Consequently, they enhance consumer experience and reduce expenses. For instance, in risk management and credit scoring, AI algorithms can examine enormous amounts of data to identify patterns and assess risk levels. This makes trade data and travel information accessible to a broader audience.

Kenya Airways (KQ) recently signed a partnership with RoamBuddy to launch KQSafari Data, a solution developed at the Fahari Innovation Hub through the airline’s Open Innovation Challenge.

The service, offering more than 2,250 affordable roaming plans in 180 countries, aims to provide travellers with seamless, reliable, and cost-effective global data connectivity, addressing one of the key challenges for international passengers.

The African Continental Free Trade Area (AfCFTA), a deal aimed at significantly increasing trade within Africa, presents unique opportunities for AI. This also applies to the Single African Air Transport Market (SAATM), which potentially links 1.3 billion people in 54 countries with a combined gross domestic product of circa $3.4 trillion.

Ethiopia has started trading under the AfCTA. AI can hence make the bloc’s work better and reach its goals in both trade and travel.

For example, AI can help improve trade logistics by making delivery systems, customs processes, and tracking and tracing more effective and efficient. It can create and find the best travel routes and multi-modal options to move goods, predict delays and give both travellers and traders real-time information.

AI can analyse trade data to identify patterns, trends and connections. This is strategic for policymakers in making better choices, predicting and responding better to future trends.

AI-powered systems can make cross-border e-commerce more efficient, a sector that is highly anticipated to grow exponentially under the AfCFTA. This is because AI can create personalised product recommendations and automate customer service.

However, for AI to achieve the goals for AfCFTA and SAATM, it is essential to have good AI governance and regulation.

More investments must be made in digital infrastructure and education. With education and training, AI can help people acquire the skills they need for an African economy that works better together.

AI systems can cross-link passenger data and baggage/cargo manifests to detect inconsistencies.

Using AI plus blockchain, border management agencies could track every cargo item and passenger bag through secure, time-stamped digital records -> making it almost impossible to insert illicit material unnoticed. The outcome is improved accountability and transparency from check-in to aircraft loading.

Kenya Bureau of Standards (Kebs) has been directed to undertake a fresh due diligence on pre-qualified firms in a multi-billion shilling tender for inspection of goods before leaving the country of origin.

The Public Procurement Administrative Review Board found that Kebs was unfair to World Standardisation Certification Testing Group (Shenzhen) Co. Ltd when it disqualified the Chinese firm without giving it a hearing.

The company, which won Pre-export Verification of Conformity for inspection of motor vehicles, spare parts and other equipment for conformity to Kenyan standards on May 9, 2022, was disqualified for the 2025-2028 tender.

The firm said that despite meeting all eligibility and mandatory requirements, it was disqualified through a letter September 23, 2025, which alleged that the company had ‘on several occasions breached its contract with Kebs thereby compromising the safety of the population’.

But the procurement watchdog said the firm was not afforded an opportunity to be heard on some of the issues which the tender evaluation committee relied upon in reaching the decision to disqualify it.

‘The Evaluation Committee, in exercising an administrative function, was under an obligation to accord the Applicant a fair hearing before making a decision that adversely affected its interests,’ said the board.

The Chinese firm’s current contract was extended for six months, on May 7 to November 8, but it was served with the termination notice, two months to the end of the contract. The firm then rushed to court and obtained orders, blocking Kebs from terminating the deal.

In the decision on October 27, the board directed Kebs to re-convene the evaluation committee and undertake a fresh due diligence exercise on the firm, ‘in strict compliance with the provisions of the Tender Document, the Act and the Regulations’.

Further, the board directed the procurement process to be concluded within 30 days from the date of the decision.

Kebs invited the bids early this year and 19 firms, including the Chinese firm, expressed interest. After the preliminary evaluation, nine tenders were found to be non-responsive and were disqualified.

The remaining 10 satisfied all the mandatory requirements and were accordingly declared responsive and subsequently admitted to the technical evaluation stage for further assessment. All the firms were recommended for pre-qualification, subject to the outcome of a due diligence exercise.

The board was informed that the head of procurement at Kebs reviewed the entire procurement process, including the evaluation of tenders, and concurred with the evaluation committee’s recommendation not to prequalify the Chinese company.

The firm said it would be exposed to financial loss and reputational harm, having legitimately expected to be pre-qualified after meeting all technical, eligibility, and financial requirements.

Some lower-tier healthcare facilities in Kenya, especially the private ones, are providing services beyond their resource capacity, the latest national survey has revealed, highlighting weaknesses in health regulation and raising concerns about patient safety and the quality of healthcare delivery.

The Kenya Health Facility Assessment, which surveyed 3,605 facilities across all 47 counties, found that many Level 2 and 3 facilities, which are designed to provide only basic outpatient and preventive services, have expanded their operations to include major surgeries, caesarean sections, and inpatient care.

Such procedures are usually the remit of Level 4 and 5 hospitals, which have the necessary surgical theatres, blood transfusion units, anaesthesia capabilities, and emergency response teams.

‘The facilities are misclassified by the Kenya Essential Package for Health (KEPH) level, or they are offering services beyond their capacity/scope. Most of the misaligned facilities are private,’ read the report.

Under the Kenya Essential Package for Health classification system, healthcare facilities are categorised from Level 1 (community services) to Level 6 (national referral hospitals), with each level expected to deliver specific services.

The report, which assessed the quality of care, service availability, and readiness, further highlighted gaps in maternal and newborn services, which are crucial indicators of the performance of the healthcare system.

Of the 6,132 facilities providing delivery services nationwide, only 37 percent had all seven Basic Emergency Obstetric and Newborn Care (BEmONC) functions.

Among the 949 Level 4 and 5 facilities offering delivery services, only 46 percent had all nine Comprehensive Emergency Obstetric and Newborn Care (CEmONC) functions.

While all Level 5 hospitals met the standard, less than half of Level 4 hospitals did, revealing significant disparities in readiness.

This means that many women are giving birth in facilities that lack the full emergency capacity to manage complications such as postpartum haemorrhage or birth asphyxia, which are among the leading causes of maternal and neonatal deaths in Kenya, accounting for nearly 60 percent of these fatalities.

The Ministry of Health attributed these trends to several related factors. In rural and peri-urban areas, patients often seek treatment at the nearest facility, even if it lacks advanced care capabilities. Additionally, weak regulatory enforcement and gaps in licensing mean that facilities can operate without routine reassessment.

The survey also revealed significant shortages in healthcare infrastructure. Only 17 percent of health facilities have on-site oxygen generation plants, which are a critical lifesaving resource during obstetric emergencies or surgeries. Many facilities also lack essential delivery devices, such as flowmeters and cannulas.

Kenya has fewer than 1,000 adult ICU beds nationwide, and only around four percent of facilities provide inpatient oncology or psychiatric services.

This forces many patients to travel long distances or to forgo treatment altogether.

While emergency response systems remain fragile, only 64 percent of facilities have Basic Life Support ambulances, and just 31 percent are equipped with Advanced Life Support units, severely limiting referral and emergency response capabilities.

South African retailer Woolworths Holdings has launched beauty products in the Kenyan market, marking an expansion from its traditional business of selling clothes as it looks to capitalise on the growing middle class.

The retailer has stocked a range of global beauty brands including Fenty Beauty, Chanel fragrances, Estée Lauder creams and W Beauty in Nairobi’s Sarit Centre store and plans to replicate a similar model in other outlets in the country.

Group CEO and executive director at Woolworths Roy Bagattini said the entry into beauty products is motivated by the growing middle class in the country and the trend in South Africa, where revenue from the beauty division has more than doubled in the past two years.

‘We think beauty, cosmetics, skin, fragrance and colour is a big opportunity in the market. A lot of customers are investing and spending more on their family, themselves and that way they shore up [demand] for such products,’ said Mr Bagattini.

Branching into beauty products positions Woolworths alongside other outlets like Linton’s Beauty World, Health and Glow and Goodlife Pharmacy. Other firms such as LC Waikiki, Miniso and Carrefour have been expanding their beauty shelves to capture the cosmetics market.

Woolworths beauty line features items such as lipsticks, foundations, toners, serums and body care essentials that targets the rising demand for premium beauty products among urban consumers.

Kenya becomes the third market outside South Africa for Woolworths to launch beauty products. It has taken a similar move in Namibia and Botswana, motivated by the doubling of beauty sales in South Africa over the past two years.

‘We’ve seen our business double in size in the last few years… we think it will double again. But we feel that the markets in Africa are underserved and under-supported, particularly from some of the bigger brands,’ said Mr Bagattini.

Woolworths currently operates 11 stores in Kenya, most of them in Nairobi, and is considering further expansion based on their commercial viability and catchment potential. Mr Bagattini said he sees room to diversify further into the food business.

‘There’s more opportunity for us to put more stores, which we will look at doing. There are possibilities and we are looking at further store openings in Nairobi specifically,’ said Mr Bagattini.

Kenya’s beauty industry has attracted an increased interest from international and regional brands, driven by the rising disposable incomes and shifting consumer lifestyles.

The skincare, fragrance and make-ups business is now one of the fastest-expanding areas in retail that has been largely supported by mall development, digital influence and the growing demand for skincare, fragrance and cosmetic products.

Pharmacy chains like Goodlife have widened access to mid-range skincare and dermo cosmetic labels as part of their wellness strategy.

The lifestyle retailers such as Healthy U continue to push for natural and clean-beauty alternatives.

Why do some drivers come to a virtual standstill when they cross the rumble strips that warn of an approaching speed bump or other hazard? Many readers

Rumble strips are a hazard warning and are not intended to be hazards in themselves. They are supposed to be designed and placed so they can be crossed with zero ill-effect on the comfort or control of the vehicles that cross them – at any speed!

Other road markings and signposts (for speed bumps or anything else) are purely visual warnings. You have to see them to take the advised action. But there are circumstances when they might not be visible, in heavy rain or when blocked by other traffic, or when the driver is not concentrating, or when the signs have been obliterated or are missing altogether.

So, if the hazard is dangerous enough, or possibly invisible and unexpected (and speed bumps certainly qualify on those counts) a signal that is not dependent on eyesight is warranted. Rumble strips step in with signals to two other senses – your ears, the seat of your pants and your hands on the steering wheel. You can feel and hear the mild vibration they cause. They should be positioned so they do not require or recommend any action ‘before’ you cross them and leave plenty of time for reaction even if the vibration is your first clue to a looming hazard.

If rumble strips interfere with the car’s handling in any way, either the strips are not properly designed or your suspension is faulty or your steering joints are excessively worn or your tyres are severely over-inflated.

In Kenya, rumble strips should be legally compulsory adjuncts to every speed bump (because their shapes and sizes are so much more severe than international practice or the stipulated Kenya Standard), but it is equally important that the warning strips are properly designed and built in accordance with the foregoing principles and intended purpose. Few hazards (especially bumps) even have the visual warning signs and locator posts which the law already specifies.

And to the greatest extent possible, rumble strips should always be positioned at a regular and regulated distance from any hazard, so the driver who feels their buzz can estimate exactly where the hazard is, even if he still cannot see it.

He knows where to look and he knows how hard to brake. If there are simple and logical ingredients as far away as possible from rocket science, these specifications would be among them.

The Nairobi-Embakasi train route is now the most booming within the Nairobi Commuter Rail (NCR) network, with revenues jumping 36.3 percent to Sh17.94 million in the six months to June this year, driven by a surge in passenger numbers.

Official data shows that revenues on the route outgrew those on the Nairobi-Ruiru route, which rose three percent to Sh16.2 million from Sh15.73 million.

For years, the Nairobi-Ruiru route has been the most profitable, but has now relinquished this dominance to the Nairobi-Embakasi route.

Some 321,659 passengers used the Nairobi-Embakasi route in the six-month period, an increase of 22 percent from 263,736 in the same period last year. Meanwhile, those using the Nairobi-Ruiru route rose marginally to 301,909 from 296,562 in the same period.

In recent years, the NCR has become critical for tens of thousands of residents and workers travelling to the capital from neighbouring towns.

The Kenya Railways Corporation (KRC) operates trains on 11 routes linking the Nairobi central business district with towns such as Kahawa, Ruiru, Embakasi, Athi River, Kikuyu, Limuru and Nanyuki.

Other towns served by the trains include Lukenya and Syokimau. KRC also operates diesel multiple units on the Nairobi-Syokimau and Nairobi-Embakasi routes.

Revenues from all the routes jumped 12 percent to Sh74.87 million in the six months to June this year compared to the same period last year, while passenger traffic grew 3.9 percent to 1.26 million.

Higher passenger numbers and growth in revenues for the trains signal a further squeeze for the public service vehicles (PSVs) plying the same routes.

The lower fares charged by the trains have been crucial in pulling thousands of workers and residents to use them instead.

Passengers pay a maximum of Sh80 for a one-way trip on the trains within Nairobi, which is lower than the Sh100 or more that PSVs charge for the same routes.

KRC revived the trains on most of the city routes during the previous administration of former President Uhuru Kenyatta, as the agency sought to grow its revenues and help address the city’s public transport chaos.

The agency has linked the metre-gauge railway to the standard-gauge railway at the Syokimau terminus, enabling passengers travelling from Mombasa to Nairobi to travel seamlessly.

KRC is seeking to upgrade seven commuter lines and acquire new trains, looking to capitalise on the increasing popularity of the trains in Nairobi and surrounding towns.

Under the World Bank-backed Kenya Urban Mobility Improvement Project, the agency will acquire high-capacity trains and roll out an automated fare collection system for the city trains.

Last year, Kenya applied for a $670 million loan from the Bretton Woods institution for this project.

The cost of a kilogramme of charcoal has jumped to the highest level in more than five years on higher demand, squeezing poor households heavily reliant on the energy source.

Data from the Kenya National Bureau of Statistics (KNBS) showed that the national average price of a kilo of charcoal stood at Sh89.83 in August, which was largely unchanged from the previous month’s Sh88.84. This marked a relentless rally in the fuel’s prices.

Poor households mainly rely on charcoal for cooking due to its affordability and accessibility compared to alternative energy sources such as electricity or cooking gas. Charcoal can often be purchased in small, affordable quantities, making it a preferred choice for households, especially those with irregular or low incomes.

The prices of charcoal in August and July are the highest since January 2020, when it hit Sh152.25 per kilo.

The impact is also felt by small businesses such as restaurants, hotels, and roadside sellers that use charcoal to prepare meals.

Charcoal prices have been rising steadily since the government banned logging in 2018 to protect the forests and preserve water towers.

The surge in charcoal prices has worsened the situation for households and businesses, which are equally facing the pressure of the rising cost of cooking gas.

The KNBS data shows that the average price of a 13-kilogramme cylinder of cooking gas increased to Sh3,158.35 in August, the highest in 10 months, dealing a setback for many consumers who had shifted to the commodity following the recent tax incentives by the government that made it more affordable.

The average price of cooking gas in August is the highest since October 2024, when it stood at Sh3,183.29.

The August prices also marked the second successive month of price increases after the average cost of the commodity, also referred to as liquefied petroleum gas, climbed to Sh3,146.58 in July, breaking a trend of drops in May and June.

‘The national average retail prices of petroleum products in August 2025 were Sh186.37 per litre for premium motor gasoline, Sh172.75 per litre for light diesel oil, and Sh156.76 per litre for illuminating kerosene,’ said KNBS.

‘Over the same period, the average retail price of charcoal was Sh89.83 per kg, while that of a 13-kg LPG cylinder stood at Sh3,158.35,’ it added.