Households defy gas price hike as uptake jumps 9pc
The State will import 30 percent of cooking gas through the National Oil Corporation of Kenya in a move aimed at controlling the price of the commodity. PHOTO | CYRIL NDEGEYA | NMG
Data from the Kenya National Bureau of Statistics (KNBS) shows that consumption of liquefied petroleum gas (LPG) hit 182,540 tonnes in the period, up from 167,200 tonnes a year earlier.
The 13-kilo cylinder of LPG ended December 2021 at Sh2,638, rising from Sh1,977 in the same month in 2020.
The growth of consumption of cooking gas indicates difficulty in switching to alternative energy sources which are cheaper including kerosene and charcoal.
Households and businesses increased their consumption of cooking gas in the six months ended December by 9.1 percent, defying a sharp increase in the price of the commodity in the review period.
Data from the Kenya National Bureau of Statistics (KNBS) shows that consumption of liquefied petroleum gas (LPG) hit 182,540 tonnes in the period, up from 167,200 tonnes a year earlier.
This came despite the introduction of value-added tax (VAT) at a rate of 16 percent on the commodity on July 1, 2021, which, for instance, hiked the cost of a 13-kilo cylinder refill by Sh600.
The 13-kilo cylinder of LPG ended December 2021 at Sh2,638, rising from Sh1,977 in the same month in 2020.
The growth of consumption of cooking gas indicates difficulty in switching to alternative energy sources which are cheaper including kerosene and charcoal.
Analysts also linked the consumption jump to aggressive marketing by companies who have turned to LPG and lubricants to protect their revenues given that the government has kept prices for super petrol and diesel unchanged despite an increase in global crude prices.
“LPG and the lubricants have now become the survival kit for oil marketers because the margins are not controlled unlike those for super and diesel,” said Powell Maimba, the former chair of Petroleum Institute of East Africa (PIEA).
“The companies have also been aggressively marketing their LPG brands.”
KNBS did not provide data on the consumption trends for charcoal which is the other alternative cooking fuel after kerosene for the low-income households.
Prices for kerosene rose to Sh103.54 per litre in December representing a Sh20 rise from two years ago while charcoal closed the year at Sh61.31 up from Sh57.76 per litre in price increases that piled more pressure on the low-income households.
Increased consumption of LPG also came at a time the cost of electricity hit record highs, prompting some households in the urban areas to resort to cooking gas.
Power bills hit a 38-month high in September last year following an increase in the fuel surcharge levied on electricity tariffs, with consumers getting fewer units for the same amount of cash compared to August.
Higher consumption of cooking gas defied earlier warnings from industry lobby group PIEA that re-introduction of the tax would reduce the use of LPG and prompt low-income households to turn to dirty fuels like charcoal and kerosene.
