{"id":141158,"date":"2026-05-15T14:02:50","date_gmt":"2026-05-15T14:02:50","guid":{"rendered":"https:\/\/chezaspin.com\/blog\/kncci-warns-fuel-shock-could-cut-msme-profit-margins-by-15pc\/"},"modified":"2026-05-15T14:02:50","modified_gmt":"2026-05-15T14:02:50","slug":"kncci-warns-fuel-shock-could-cut-msme-profit-margins-by-15pc","status":"publish","type":"post","link":"https:\/\/chezaspin.com\/blog\/kncci-warns-fuel-shock-could-cut-msme-profit-margins-by-15pc\/","title":{"rendered":"KNCCI warns fuel shock could cut MSME profit margins by 15pc"},"content":{"rendered":"

NAIROBI, Kenya, May 15 \u2014 The Kenya National Chamber of Commerce and Industry (KNCCI) has warned that the latest fuel price increase could cut MSME profit margins by up to 15 per cent, while triggering sharp rises in manufacturing, transport, and food distribution costs across the economy.<\/strong><\/p>\n

In a statement issued Friday, KNCCI President Dr Erick Rutto said the latest Energy and Petroleum Regulatory Authority (EPRA) pricing review will significantly raise operational costs for businesses, particularly following the sharp increase in diesel prices.<\/p>\n

Under the new pricing cycle running from May 15 to June 14, diesel prices in Nairobi rose by Sh46.29 to Sh242.92 per litre, while super petrol increased by Sh16.65 to Sh214.25 per litre.<\/p>\n

KNCCI warned that the diesel-driven fuel shock is likely to trigger widespread inflationary pressure across transport, logistics, manufacturing, agriculture, and trade sectors.<\/p>\n

\u201cThe current fuel increase is not just an energy issue; it is an economy-wide shock,\u201d Rutto stated.<\/p>\n

According to the Chamber, the latest fuel adjustments are expected to increase transport and logistics costs by between 10 and 20 per cent, while manufacturing and farm distribution expenses could rise by between 5 and 12 per cent.<\/p>\n

KNCCI further projected that food and consumer goods prices could increase by between 3 and 7 per cent as businesses pass rising operating costs to consumers.<\/p>\n

Heightened vulnerability <\/h2>\n

The business lobby particularly warned that micro, small, and medium-sized enterprises (MSMEs) face heightened vulnerability due to thinner operating margins and limited financial buffers.<\/p>\n

\u201cThe latest increase is expected to squeeze MSME cashflows and profit margins by between 5 and 15 per cent,\u201d the Chamber stated.<\/p>\n

\nNdindi Nyoro proposes VAT cuts, levy removal to lower fuel prices below Sh190<\/a>\n<\/div>\n

KNCCI noted that diesel remains central to Kenya\u2019s productive economy because it powers transportation networks, agricultural operations, logistics systems, construction activities, manufacturing plants, and distribution chains.<\/p>\n

\u201cAny increase in diesel prices quickly feeds into the cost of moving goods, producing essential commodities, and delivering services across the economy,\u201d Rutto said.<\/p>\n

The Chamber warned that the sustained rise in fuel prices since January is already weakening Kenya\u2019s regional business competitiveness.<\/p>\n

Since January, petrol prices have increased by 17.4 per cent while diesel prices have surged by 42.5 per cent, reinforcing what KNCCI described as a \u201cdiesel-led fuel shock.\u201d<\/p>\n

The Chamber argued that Kenya risks losing its competitiveness advantage in logistics, manufacturing, and cross-border trade compared to regional peers with lower fuel costs.<\/p>\n

\nNdindi Nyoro warns of economic shock as fuel prices surge past Sh240<\/a>\n<\/div>\n

KNCCI called on the government to urgently implement cushioning measures, including reviewing fuel taxes and levies, strengthening fuel price stabilization mechanisms, improving price transparency, and providing targeted relief to fuel-intensive MSMEs.<\/p>\n

The Chamber also urged authorities to reduce inefficiencies within ports, transport systems, storage infrastructure, and fuel distribution networks to ease domestic cost pressures.<\/p>\n

KNCCI further advocated for greater diversification toward African oil-producing markets and renewed investment in regional refining capacity to reduce reliance on expensive refined imports.<\/p>\n

The business lobby said it remains ready to work with the government, EPRA, the National Treasury, manufacturers, transporters, and other stakeholders to develop long-term solutions aimed at protecting livelihoods and sustaining enterprise growth.<\/p>","protected":false},"excerpt":{"rendered":"

NAIROBI, Kenya, May 15 \u2014 The Kenya National Chamber of Commerce and Industry (KNCCI) has warned that the latest fuel price increase could cut MSME profit margins by up to 15 per cent, while triggering sharp rises in manufacturing, transport, and food distribution costs across the economy. In a statement issued Friday, KNCCI President Dr […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-141158","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/141158","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/comments?post=141158"}],"version-history":[{"count":0,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/posts\/141158\/revisions"}],"wp:attachment":[{"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/media?parent=141158"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/categories?post=141158"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chezaspin.com\/blog\/wp-json\/wp\/v2\/tags?post=141158"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}