Market News

Households feel heat of rising gas prices

gas

LPG vendor. FILE PHOTO | NMG

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Summary

  • Households are feeling the pinch of higher energy costs following an increase in the average price of a 13-kilogramme cylinder of liquefied petroleum gas (LPG) by more than Sh100 since December.
  • A spot check by the Business Daily on Friday showed that a 13-kilogramme gas cylinder at Rubis is priced at Sh2,250, while at Total it costs Sh2,040 and Shell Sh2,150.
  • Independent dealers said they are selling the same quantity at between Sh2,000 and Sh2,100.

Households are feeling the pinch of higher energy costs following an increase in the average price of a 13-kilogramme cylinder of liquefied petroleum gas (LPG) by more than Sh100 since December.

The average price of the cooking gas had dropped to Sh1,977 from Sh2,020 in November, a survey by the Kenya National Bureau of Statistics (KNBS) shows, but this has since tracked back above the Sh2,000 mark following a general increase in fuel process globally.

Petroleum Outlets Association of Kenya (POAK) Chairman Martin Chomba said the rise in fuel prices over the past two months is to blame for the increased price of gas.

“LPG is a by-product of crude oil refining thus the recent increase in crude oil prices will be reflected on it… we have also seen the price of a litre of super petrol rise from around Sh75 to Sh114 in less than five months,” Mr Chomba said.

Reuter’s data shows that the price of a barrel of oil had gone up to $65.90 (Sh7,203) at the end of last week from $51.70 (Sh5,677) at the beginning the year.

Unlike petrol, diesel and kerosene however, the price of LPG in Kenya is not regulated by the Energy and Petroleum Regulatory Authority (Epra), and there is no centralised import mechanism like the one in place for the other fuels.

This means that the price of gas can vary significantly depending on the seller and here they sourced their gas.

The energy regulator has in recent years stated intentions to start regulating the price of gas, and to streamline the import mechanism by implementing a plan similar to the Open Tender System used to bring in the other petroleum fuels.