Cooking gas prices have increased by Sh300 since March on rising international costs, narrowing the benefits that came with removal of tax on the commodity.
Total Kenya, #ticker:TOTL which has the largest gas market share, is charging Sh2,290 to refill a 13-kg cylinder in Nairobi, up from 2,050 in April and below Sh2,000 where gas prices remained since last July.
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 prices touched an eight-year low in March, 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 five-year high.
Dealers have attributed the rebounding prices to higher global costs 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. KenolKobil #ticker:KENO is selling its K-gas brand at Sh2,150.
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.
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.
Gas prices are rising in a period that has seen diesel, kerosene and petrol have dropped.
A litre of diesel is retailing at Sh89.02, down from Sh91.39 in March while petrol has dropped by Sh1.50 to Sh100.4 in the period.
Expensive gas will add to rising prices of foods that has become a political headache for President Uhuru Kenyatta as he seeks a second term in August elections.