TotalEnergies Marketing Kenya has not lowered prices of liquefied petroleum gas (LPG), denying consumers the benefit of a reduction in value-added tax on cooking gas.
A spot check at the company's fuel stations shows TotalEnergies has kept LPG prices unchanged at Sh3,330 for the 13-kilogramme gas and Sh1,540 for the six-kg cylinder.
Parliament halved VAT on cooking gas to eight percent effective July 1 and the reduction was expected to be passed on to households and businesses through lower prices.
TotalEnergies’ rivals, Rubis Energy and Vivo — retailers of Shell branded products — are selling their LPG at up to Sh450 lower.
The 13-kg gas is retailing at Sh2,880 at Rubis Energy’s outlets and Sh3,100 at Shell stations. The two marketers are selling the six-kilogramme commodity at Sh1,350 and Sh1,440, respectively.
State-owned National Oil Corporation of Kenya is selling the six-kilogramme gas at Sh1,400 and the 13kg cylinder at Sh3,050.
Gas cylinder exchanges were stopped, meaning that consumers with TotalEnergies equipment cannot switch to take advantage of cheaper prices by the company's rivals.
Industry regulator, Energy and Petroleum Regulatory Authority (Epra) had said it expected dealers to lower LPG prices in the wake of the halving of the VAT.
TotalEnergies had not responded to texts and calls from Business Daily on why it has failed to adjust LPG prices to mirror the tax cuts at start of last month by the time of going to press.
Consumers have grappled with record high prices of LPG since July last year when 16 percent VAT was re-introduced on the commodity.
Oil marketers increased prices from an average of Sh2,250 for the 13-kg gas and Sh950 for the six-kilogramme commodity attributing the hikes to a combination of the re-introduction of VAT and global rally in the costs of crude.
LPG prices are not controlled unlike petrol, diesel and kerosene with the government stating price controls on cooking gas will deter investors from coming into the industry.
An estimated 90 percent of Kenya’s LPG imports are handled by a single firm. The entry of more players in the sector is expected to bring down prices of the commodity by lowering handling fees.
Epra has given Ola Energy and Lake Gas the go-ahead to construct facilities to handle 14, 500 tonnes and 10, 000 tonnes respectively of LPG in a bid to lower the cost of handling gas and pass this to consumers through reduced prices.
The government will also build a common user facility at the Kipevu Oil Terminal that will allow gas imports to be done through the Open Tender System.
OTS will allow the government to award one of the dealers tender to import LPG for the industry at the lowest prices as it happens in the importation of super, diesel, and kerosene.
