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Economy

Cooking gas prices hit 16-month high

Official data shows that the cost of refilling a 13-kg gas cylinder rose to an average of Sh2,140 in October. FILE PHOTO | NMG
Official data shows that the cost of refilling a 13-kg gas cylinder rose to an average of Sh2,140 in October. FILE PHOTO | NMG 

Cooking gas prices have shot to a 16-month high, returning to levels seen before the government removed value added tax (VAT) on the clean fuel.

Official data shows that the cost of refilling a 13-kg gas cylinder rose to an average of Sh2,140 in October, up from 2,094 a month earlier and Sh2,080 in August.

October’s cost is the highest since June last year, when Treasury scrapped VAT on gas to cut costs and boost uptake among poor households who rely on dirty kerosene and charcoal for cooking.

Prices stood at an average of Sh2,229 in June, and dropped to below Sh2,000 in July, a month after the scrapping of the 16 per cent VAT.

The price has, however, recently been on a steady climb from Sh1,989 in January 2017, to  Sh2,063 in April and a 16-month high of Sh2,140 last month, according to the Kenya National Bureau of Statistics (KNBS).

The rise happened in an environment of lower inflation which dropped to 5.72 per cent in October from 7.06 per cent a month earlier.

The Ministry of Energy recently pointed out that gas prices have remained high despite the tax removal and relatively lower prices of crude oil – from which LPG gas is derived.

This has seen the Energy Regulatory Commission (ERC) indicate plans to begin publishing cooking gas prices to enable consumers push cash-hungry dealers to lower the cost of the commodity.

The publishing of the indicative prices across counties will come ahead of the plan to impose price controls on cooking gas, similar to those introduced on diesel, petrol and kerosene costs in 2010.

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

Industry data shows that gas consumption jumped 53 per cent in the first half of the year to 34,563 metric tonnes, compared to 22,608 metric tonnes in a similar period last year.

Kenya imports all its cooking gas, also known as liquefied petroleum gas (LPG), which is processed from crude oil.

This includes imports through the Mombasa port and shipments from neighbouring Tanzania by trucks across the border, mainly Lake Gas.

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