Market News

Cooking gas prices hit 42-month low on virus woes


Cooking gas on sale. The logging moratorium is fuelling cooking gas uptake. FILE PHOTO | NMG

The price of 13-kiogramme liquefied petroleum gas (LPG) fell to a three-year-low of Sh2,033.57 in September on poor global demand for oil due to restrictions to curb the spread of Covid-19, new data shows.

The Kenya National Bureau of Statistics (KNBS) data shows that the September prices of 13-kilo LPG is the lowest since 2017 when it retailed for Sh1,998.70.

Wanjiku Manyara, general manager at the Petroleum Institute of East Africa (PIEA) links the drop to a slump in the global crude oil market.

“This should be an indicator or reflection of the global crude oil prices reduction that we have experienced this year on account of the effects of the current global pandemic.

“LPG is a byproduct of crude oil refining and hence a drop in crude oil prices will be reflected on petroleum products,” she said.

In March, the indicative Brent crude price plummeted 25 per cent to an average of $33.90 (Sh3,734.42) a barrel, the steepest one-day decline since the 1991 Gulf War.

“In 2019, Kenya’s petroleum product imports amounted to $3.31 billion, and the average price of our benchmark oil product was $66.5 (Sh7,325.64) per barrel. The benchmark price now has fallen to $51 (Sh5,618.16) per barrel, which portends significant savings,” said the Central Bank of Kenya in March.

This comes at a time when logging moratorium is fuelling cooking gas uptake, generating a demand-driven enterprise across Kenya that saw 234,400 tonnes of LPG imported in the first nine months of 2019.