Cut in electricity prices ease inflation to 5.39%

The rate of inflation in the country defied the marginal increases in prices of food to ease for the fourth month in a row, helped by lower prices of electricity.

Data by the Kenya National Bureau of Statistics (KNBS) released on Monday showed the rate of increase of basic goods and services dropped to 5.39% in January from a high of 5.73% in December.

It has been consistently dropping since September last year when it peaked at 6.91% to 5.73% in December. January’s inflation is the lowest since September last year.

“The overall year on year inflation rate as measured by the Consumer Price Index (CPI) was 5.39%, in January,” said the KNBS in a statement on Monday.

“The Housing, Water, Electricity, Gas and other Fuels’ Index, decreased by 0.75% between December 2021 and January 2022. This was mainly attributed to a decrease in prices of electricity.”

The Energy ministry in January finally gazetted a 15% cut in electricity tariffs in line with President Uhuru Kenyatta’s promise providing a big relief for consumers and businesses hurting from the impact of the Covid-19 pandemic.

The cut saw low-income households who use less than 100 units save Sh3.3 per unit while ordinary consumers will save Sh3.2 per unit.

Small industrial users of less than 100 units got a Sh7.9 cut per unit while small industrial consumers of less than 15,000 units would save Sh3.2 on their monthly bills.

At 5.39%, the inflation is within the government’s target of between 3.5 and 7.5%.

The KNBS data showed, food inflation, went up by 1.07% in January from the previous month as the prices of key foodstuffs shot up outweighing the decrease in prices of others.

The average price of 2 kilogrammes of sifted maize meal stood at Sh126.31 in January compared to Sh118.71 in December while the average price of a kilogramme of kale or Sukuma wiki went up to Sh59.36 in January from Sh56.17 in December.

A kilo of onions jumped 3.64% to Sh127.94 in January from Sh123.43 in December.