Kagwe in tax relief talks for oxygen firms on virus surge

Ministry of Health has now opened talks with the Treasury on a proposal to offer tax reliefs to medical gas manufacturers amid a biting oxygen supply shortage in hospitals due to a spike in Covid-19 infections.

Health secretary Mutahi Kagwe said the oxygen demand was almost outstripping supply after hospitalisation for Covid-related complications surged by more than half in two weeks, forcing authorities to restrict movement into and out of Nairobi metropolitan area and Nakuru County.

Demand for oxygen for Covid-related emergency medical care has more than doubled to about 880 tonnes from 410 tonnes last year and 560 tonnes in January, reflecting elevated third-wave infections, which have averaged 20 per cent of testing in recent weeks.

“Because of the emergency nature of the requirement of oxygen, we are going to work with the Treasury to see whether we can increase the oxygen cylinder supply via reduction of some of the taxes. But this is a discussion that we need to get together with the industry,” Mr Kagwe said.

“The situation at the moment is that the (gas manufacturing) industry is completely stretched. If we go any further than that, immediate steps will have to be taken.”

An ample supply of oxygen is needed for the management of Covid-19 patients, who experience breathing difficulty.

The surging third wave of Covid-19 in Kenya has seen hospital admissions increase 52 per cent in two weeks by Friday.

Currently, 121 patients lay in the intensive care units (ICUs) with 32 on ventilatory support and 82 on supplemental oxygen.

The positive test rate hit 22 per cent last week compared with January’s two per cent. This month, an average of seven Kenyans have died each day from Covid-19, up from three a day in January and February.

Reduced taxation, which will need Cabinet and parliamentary approval, is part of the strategy the ministry is mulling in a bid to ramp up investments in the medical gas industry.

Some of the country’s about 75 oxygen plants have stalled due to challenges related to the supply of spare parts, he said, adding that the ministry would engage the 47 counties and the industry to develop common standards for oxygen plants in future.

This came amid pleas by leading gas manufacturers, BOC Gases and Gas Africa, to hospitals and homes holding onto idle oxygen cylinders to immediately surrender them.

“It’s a crisis and we need all the help we can get from the patients and from hospitals that are holding the (oxygen gas) tanks. If you are holding cylinders at home or in the hospitals for non-Covid or non-emergency care, please return them to us,” said BOC managing director Marion Mwangi.

The ministry has, in the meantime, asked hospitals to fast-track installation of oxygen piping infrastructure to bedsides rather than current situation where “the cylinders are being used per patient” in most hospitals.

“[This is] inefficient because one cylinder can be used by quite a number of people if the oxygen has been piped to the bedsides,” the minister said.

The ministry is further engaging the 47 counties and the industry in a bid to develop common standards for oxygen plants in future to address challenges related to supply of spare parts and quality of the oxygen produced.

“We can’t get spare parts for some of the plants that were built a couple of years ago essentially because they came from sources that are suspect,”Mr Kagwe said.

“The oxygen plant in Kenya National Hospital (KNH) was, for example, supplied by then Czech Slovakian Republic. The country itself does not exist (today), and so how can they even start to repair the plant at KNH?”

Gas Africa managing director Raj Ram said the industry has slowed production of industrial gas, largely used in food processing and horticulture, in favour of medical gas.

“We have also sent out circulars to industries that we only be selling medical oxygen cylinders in the foreseeable future. We are delivering through the night. Orders have increased six-fold in some cases,” Mr Ram said.