State seeks Sh2.5 billion for school, hospital gas supplies

Principal Secretary for the State Department for Petroleum Mohammed Liban on April 30, 2024.  

Photo credit: Dennis Onsongo | Nation Media Group

The State Department for Petroleum is seeking to spend Sh2.5 billion from the fuel anti-adulteration levy on constructing gas facilities in schools and public institutions.

Petroleum PS Mohammed Liban told the National Assembly Committee on Energy that he has written to the Treasury to allow for the spending of the levy on the construction of liquified petroleum gas (LPG) in public schools, health facilities, prisons, and the National Youth Service.

The law requires payment of the anti-adulteration levy on all illuminating kerosene imported into the country for home use.

The levy was introduced through the Finance Act 2018 following an amendment to the Miscellaneous Fees and Levies Act 2016.

The importer is required to pay the levy, which is set by law at Sh18 per litre of the illuminating kerosene’s customs value, at the time the kerosene is entered into Kenya.

The levy is intended to shield drivers from dishonest fuel vendors who were adulterating diesel by profiting from the significant price differential between diesel and kerosene.

The primary reason for the disparity in costs was the exclusion of kerosene from the road maintenance levy, which is levied at a rate of Sh18 per litre of gasoline and diesel.

Mr Liban informed the Mwala MP Vincent Musyoka-led committee that he was requesting Treasury authority to use the levy’s yearly collection of Sh2.5 billion to install LPG facilities in public schools and other institutions.

“The Treasury said this will require some legislation for us to get that money,” he said.

“We are seeking this committee intervention to have this money redirected for the construction of LPG.”

Mr Liban told the committee that the ministry has already mapped out 7,000 public schools that have expressed interest in being fitted with LPG.

“Over 7,000 schools have expressed interest. Nearly 70 percent of these schools use firewood for cooking,” he said.

"Our strategy is to start with public schools then public institutions, hospitals prisons, and NYS."

Mr Liban said the Ministry would only construct LPG facilities in 300 to 500 schools annually with the budgetary allocation for the financial year 2024/25.

"For schools, we have already started piloting the project. We are also looking at a partner to help us achieve this goal of connecting all public institutions to LPG," Mr Liban said.

Mr Liban told the MPs three sub-committees had been formed to ensure safety and security for the implementation of gas for schools project.

He said he chairs the technical committee that is assessing the safety and security issues.

The committee, he said, comprises officials from the Ministry of Education, Energy and Petroleum Regulatory Authority, National Environment and Management Authority, and the Kenya Bureau of Standards.

Mr Liban said the Ministry has advertised for procurement of the LPG for public institutions and Nema is undertaking an Environmental Impact Assessment to ensure the safety of the LPG facilities.

"LPG will be an alternative to mattresses which students burn when there is a riot. We will have a parameter fence on these facilities to ensure students don't access it," he said.

"We will also undertake education and sensitive the students and the school management on the safety and security issues," Mr Liban said.

The Energy Committee had in 2023/24 budget estimates recommended that the proceeds of the anti-adulteration levy be channelled towards the construction of LPG facilities in public institutions.

The committee directed the Treasury to present the status of the implementation of the House resolution to transfer the anti-adulteration levy towards LPG.

President William Ruto last year directed all public schools and public institutions to ditch firewood and other fuels for LPG by 2025.

Mr Libansaid the three-year plan will also include regulating cooking gas prices to stabilise the market and reduce the usage of dirtier fuels that harm the environment while worsening the disease burden.

The State Department for Petroleum said the plan has not taken off as envisaged due to budgetary constraints.

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