Economy

Funding cuts hit Sh2.5bn LPG project for schools

RTLPG

Cooking gas prices will fall by around Sh430 for the 13-kilogramme if Parliament adopts a government proposal to scrap three taxes on the commodity. FILE PHOTO | NMG

President William Ruto's plan to provide cooking gas for learning institutions will take longer to be realised after the Treasury failed to allocate Sh2.5 billion in the financial year starting July 1.

The Petroleum ministry told Parliament that the Treasury has not allocated any money to implement a presidential directive to promote the use of clean cooking gas solutions in 5,000 public boarding institutions across the country by 2025.

“The target for this calendar year is 500 public boarding schools to the tune of Sh2.5 billion,” Mohamed Liban, the Petroleum principal secretary told MPs.

Read: Cooking gas consumption drops 35pc on high prices

Mr Liban told MPs that the project involves the construction of liquefied petroleum gas (LPG) bullets, cook-stoves and piping in each of the schools.

“The needed funds have not been provided,” he told the National Assembly’s Energy committee chaired by Mwala MP Vincent Musau.

Appearing before the committee to present the ministry’s plans as contained in the 2023/24 Budget Policy Statement (BPS), Mr Liban said the project is to be funded by the Anti-Adulteration Levy.

President Ruto last week directed all public institutions including schools using biomass as primary cooking fuel to transition to LPG by 2025.

Dr Ruto issued the directive when he presided over the opening of Taifa Gas in Mombasa. He said the adoption of clean modern cooking reduces the appetite for wood fuel, which has led to illegal logging.

“All public institutions that currently utilise biomass as their primary cooking fuel will be required to transition to LPG. In particular, public educational institutions must ensure that this transition is completed by 2025,” Dr Ruto directed.

Dr Ruto said household LPG use in Kenya is greater than the African average of 3 kg per capita but falls below global practice of between 10-15 kg per capita.

He said there has been an increased growth in the consumption of LPG by Kenyan households, reporting a per capita increase from 2kg in 2012 to 6.6kg in 2020, and 7.5kg in 2022.

LPG consumption has been on the decline following the re-introduction of the 16 per cent VAT on cooking gas and the high costs of crude globally due to the Russia-Ukraine war.

Kenya introduced a value-added tax (VAT) of 16 percent on LPG in July 2021, causing a further rise in prices but was later halved to 8.0 this year, after a public uproar.

LPG prices shot up by at least Sh350 due to the tax and high costs of crude globally further driving the prices, hurting the ability of homes to buy the commodity and prompting a return to dirty fuels like charcoal and kerosene.

Read: Low cooking gas use signals tough times

The rise in gas prices has pushed more Kenyans to use dirty fuels such as charcoal and firewood as they struggle with the soaring cost of living that has seen inflation rise to 8.5 percent, the highest since July 2017.

According to the 2019 population census, nearly a quarter (24 percent) of Kenyan households primarily depend on cooking gas as their main source of cooking fuel.

KNBS data says the usage of cooking gas is highest in urban areas at 52 percent while only five percent of rural households use LPG.

Firewood is the most popular cooking fuel in the country with a usage of 55 percent nationally and 84 percent in the rural set-up.

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