Cooking gas prices (13-kg cylinder) dipped below Sh2,000 last July for the first time in many years.
The drop in gas prices was one of the few bright spots last month in an otherwise tough period of rising household costs.
Unlike petrol, diesel and kerosene, cooking gas prices are not regulated by the Energy Regulatory Commission
Cooking gas prices have fallen to an eight-year low following removal of tax on the commodity, offering some relief to homes in a period of rising food and fuel costs.
Official data shows that a 13-kilogramme liquefied petroleum gas (LPG) cylinder cost an average of Sh1,976 last month, down from Sh1,989 in January — representing levels last seen in 2009.
Cooking gas prices (13-kg cylinder) dipped below Sh2,000 last July for the first time in many years after the Treasury scrapped value added tax (VAT) on the product to cut costs and boost uptake among poor households.
The drop in gas prices was one of the few bright spots last month in an otherwise tough period of rising household costs, including in energy where electricity and kerosene costs rose. Higher food and fuel prices pushed inflation to a four-year high of 9.04 per cent in February.
“Between January and February 2017, housing, water, electricity, gas and other fuels’ index, increased by 0.4 per cent…this was mainly due to increases in cost of electricity, kerosene and house rents which outweighed price decreases in the cost of cooking gas,” said the Kenya National Bureau of Statistics in its February inflation report.
The rally in food prices has been attributed to the prevailing drought conditions, while the transport costs are being driven up by the rising price of crude in the international market.
The KNBS data shows that cooking gas prices have dropped by Sh342 in the past year or a 17 per cent reduction.
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.
Data from the Petroleum Institute of East Africa shows that gas sales stood at 144,573 metric tonnes in the nine months to September 2016, double the 78,000 metric tonnes that was consumed nine years ago.
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.
The government had in the past announced plans to set up a common user import terminal for cooking gas at the defunct refinery’s grounds in Mombasa, effectively giving it control over gas storage facilities.
