Consumption of kerosene in the first half of a year has dipped to record lows amid high prices as more homes increasingly turned to cooking gas.
An analysis of data shows that use of kerosene dipped 47 percent to 23.1 million litres from 43.6 million litres while consumption of Liquefied Petroleum Gas (LPG) rose by 17 percent to hit a record high of 195,450 tonnes in the same period from 167,080 tonnes.
The trend is a major boost to the government’s agenda of scaling up use of clean cooking fuels, notably LPG to lower the environmental and health risks posed by use of kerosene and other dirty fuels such as charcoal and firewood.
Kerosene is largely used for cooking and lighting by low-income homes and its demand has been slowed by the high prices. A litre of kerosene is retailing at Sh163.05 in Nairobi as at June, up slightly from Sh161.03 a year ago.
The six-kilogramme container of LPG is retailing at an average of Sh1,350 in Nairobi while the 13-kilogramme pack is going for Sh3,200 up from an average of Sh1,170 and Sh2,690, respectively.
The drastic drop in kerosene use in the first half of this year could however also signal that part of the low-income homes have increasingly turned to charcoal, which is cheaper. Unlike the other fuels, monthly figures on consumption of charcoal are not available.
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The government has set an ambitious target ensuring that at least 4.5 million low-income homes use LPG as the primary cooking fuel by 2030.
Demand for kerosene had at one time hit a record high of 290.67 million litres in the first half of 2018, mainly attributed to the low prices of the commodity when a litre of kerosene went for Sh76.75 in March of that year.
But the consumption has subsequently dropped year-on- year as the prices of kerosene increase as demand for LPG has been growing over the years.
Scaling up use of LPG as the primary cooking fuel is a key agenda of the government, in a twin-pronged approach to curb environmental pollution from fossil fuels and reduce health risks tied to use of kerosene.
The ambitious plan involves removal of taxes and also rolling out a plan to supply LPG containers at subsidised prices to the low-income homes.
Last year, the 16 percent Value Added Tax (VAT) on cooking gas was removed in a bid to lower prices of the commodity and boost uptake.
But despite the tax removals, prices of LPG have not dropped as earlier anticipated, raising questions on the effectiveness of the policy shift.
There are also plans to set up a common-user facility for importation of cooking gas at the port of Mombasa in what will offer the government a chance to control prices of LPG.
Besides the common-user facility, the government is also banking on entry of more firms into the cooking gas handling business to compete with the Africa Gas and Oil Ltd, which handles 90 percent of the LPG imports.
