Kenya to curb rising fuel, food prices

2011-04-28 11:11

Nairobi - Kenya has scrapped all taxes on kerosene and will raise the minimum wage next week to help low-income families deal with soaring prices of basic commodities, its prime minister said on Wednesday.

Raila Odinga told parliament that the east African nation will also remove import duty on wheat and maize imported by private millers.

"Such increment [in the minimum wage] should have come after two years but we will do it now to address the high cost of living," Odinga said.

Odinga said details of the increase in the minimum wage would be unveiled on May 01.

The average minimum monthly wage as of 2009 for a worker in the agricultural sector, stood at 4 076 shillings, while that of a worker in urban areas stood at an average of 7 607 shillings, according to the government's 2010 Economic Survey.

The tax relief on kerosene announced by Odinga comes after Finance Minister Uhuru Kenyatta last week announced a 30% cut in taxes on kerosene to cushion the impact of escalating fuel prices.

Fuel prices can have a significant effect on the rate of inflation in east Africa's biggest economy because many of its 40 million people rely on kerosene for lighting and cooking.

Odinga said the government's latest action will cut the price of kerosene by more than seven shillings a litre.

"For immediate relief, the Government has removed all taxes and levies on kerosene to reduce the cost of light and cooking energy," he said.

- Reuters