A 150 per cent jump
The cost of imported goods is set to rise following decision by shipping lines to more than double fees charged to facilitate emergency security measures in case of pirate attacks.
The shipping lines have announced that they will increase the emergency surcharge fee per container from Sh16,740 to Sh41,550, a 150 per cent jump.
This will pile pressure on the cost of imported goods like petroleum, cooking gas, electronics and machinery already hit by the increased cost of commodities at the international market and the weakening Shilling.
“The costs associated with piracy are increasing and this is affecting business at the port,” said Agayo Ogambi, a senior official of the Kenya Shippers Council (KSC).
He said the Council plans to oppose the new fees.
The increase in emergency surcharge fees -that enables shipping lines to take security measures in case of an attempted attack – apply to the ports of Mombasa and Dar as Salaam.
It is another blow to these ports that have been given a wide berth by cruise tourists wary of attacks by gangs from Somalia.
The new fees are understood to have been triggered by the increasing cost of hiring private security for vessel escort because of shortage of officers with naval experience.
Most African countries retain skeleton naval units meaning that unlike in the army, the supply of retired naval officers to undertake private security guards is scarce.
Consumers
Shipping lines have stopped depending entirely on the naval ships from patrolling in the Indian Ocean because attacks have persisted as pirates take advantage of the long coastline and the vast unpoliced interior of the Indian Ocean.
The new costs are a major blow to consumers already hit by rising inflation and the weakening of the Shilling that has made imported goods to be more expensive.
Kenyan inflation surged to 9.2 percent in February from 6.5 per cent a month before because of higher food and fuel prices, said the Kenya National Bureau of Statistics.
The Kenyan Shilling has also lost against major world currencies since January this year, meaning importers are paying more for same products.
In early February, the Shilling exchanged Sh81.27 to the US dollar.
Source: Business Daily
