Cooking gas prices cross Sh2,000 mark

Paul Gitachu ferries an assortment of cooking gas cylinders to customers in Ol Kalou Town in Nyandarua County, February 21, 2016. FILE PHOTO | NMG

What you need to know:

  • Total Kenya, which has the largest gas market share, is charging Sh2,050 to refill a 13-kg cylinder. KenolKobil is selling its K-gas brand at Sh2,030.
  • Other dealers have, however, maintained their price below Sh2,000.
  • Unlike petrol, diesel and kerosene, cooking gas prices are not regulated by the Energy Regulatory Commission.
  • The prices tanked below Sh2,000 last July after the Treasury scrapped value added tax.

Cooking gas prices have crossed the Sh2,000 mark for the 13-kg cylinder for the first time since last July, when the government scrapped tax on the commodity.

Total Kenya, which has the largest gas market share, is charging Sh2,050 to refill a 13-kg cylinder in Nairobi while KenolKobil is selling its K-gas brand at Sh2,030.

The prices tanked below Sh2,000 last July after the Treasury scrapped value added tax (VAT) on cooking gas to cut costs and boost uptake among poor households.

Cooking gas touched an eight-year low last month, making it one of the few bright spots more recently in an economy characterised by rising food and fuel prices that pushed inflation to a four-year high.

Dealers have attributed the rebounding prices to higher global cost at a time when the price of crude oil, from which the gas is extracted, is rising.

Total Kenya’s gas market share stood at 20.3 per cent last year while Kenol’s was 11.8 per cent.

Other dealers have, however, maintained their price below Sh2,000.

Shell, dealer of Afrigas brand, for instance, is refilling the 13-kg cylinder at Sh1,980 in Nairobi while State-owned National Oil charges the lowest at Sh1,950 for its SupaGas brand.

Shell is operated by Vivo Energy and commands a 10.7 per cent share of Kenya’s cooking gas market.

Low pricing

The company has been keen to use low pricing to grow market share.

Unlike petrol, diesel and kerosene, cooking gas prices are not regulated by the Energy Regulatory Commission (ERC) and have been left to market forces.

Gas has become the preferred energy source for households, especially in major towns, due to its convenience and because it is cleaner than other cooking fuel.

Total charges Sh950 for a 6-kg cylinder, KenolKobil (Sh980), Shell (Sh970) and Sh900 for National Oil.

The VAT removal on gas was part of the government’s plan to wean rural homes off reliance on toxic firewood, kerosene and charcoal.

Oil marketers have, however, been pushing for more rigorous checks on unlicensed gas operators, whom they accuse of undercutting the market through irregular refilling.

Through the Petroleum Institute of East Africa, the marketers claim that over half of gas cylinders in the market are illegally refilled, posing danger to users.

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