Use of cooking gas up 15pc despite increasing prices

 Gas cylinders on display at Nairobi’s Pipeline Estate on October 9, 2022.

Photo credit: File | Nation Media Group

Kenyans increased their consumption of cooking gas in the first eight months of this year by 15.4 percent despite a steady increase in the price of the commodity.

Official data from the Kenya National Bureau of Statistics (KNBS) shows that consumption of Liquefied Petroleum Gas (LPG) rose to a record 271,070 tonnes in the review period.

This marks an increase of 36,350 tonnes compared to total consumption of 234,720 tonnes during the same period last year.

The increase in consumption defied the increase in the price of the commodity during the eight-month period. The average price of 13kg of cooking gas was Sh3,198.66 in the eight months to August, according to KNBS.

This is an increase of 6.5 percent compared to an average price of Sh3,003.53 during the same period in 2023. The price of the commodity has kept rising this year despite a strong shilling, driven by higher global prices.

Some 94.7 percent of the energy consumed in Kenya is made from biomass such as firewood, charcoal, and coal, according to the Energy and Petroleum Regulatory Authority (Epra).

"Demand for Liquefied Petroleum Gas (LPG) recorded an increase in 2023 to 360,594 tonnes from 333,830 tonnes in 2022. The increase can be attributed to government policy to promote use of clean energy such as zero-rating taxes on LPG through the Finance Act of 2023, which led to reduction in the price of the commodity,” says Epra.

While the burning of cooking gas produces emissions, it is seen as a cleaner source of energy and is key for the energy transition. However, the majority of Kenyans, especially those living in rural areas cannot afford cooking gas.

The Kenyan government has in recent years come up with various strategies targeting to increase the per capita consumption of cooking gas as part of its green goals.

This includes tax incentives in a bid to lower the cost of the commodity. Last year for instance, President William Ruto removed the 8 percent Value Added Tax (VAT) on the commodity through the Finance Act, 2023.

The changes, which took effect in July last year, significantly cut the price of cooking gas, handing a major relief to consumers.

The government is also planning to regulate the prices of cooking gas in the same way it controls fuel and electricity prices.

This is because of the belief that with only a few private players controlling the importation and handling of the commodity, they exercise too much power over the cost of the commodity.

This means that oftentimes, government interventions such as lowering taxes on cooking gas do not always trickle down to consumers. To do this, the government wants to introduce the Open Tender System (OTS) for importation of the commodity.

Under the OTS, LPG dealers will be bidding for the contract to import the product for a defined period of time, usually a month. The winning bidder will then supply the product to other dealers at a defined price during the period.

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