Gas tax set to push households back to wood fuel

The reintroduction of value-added tax (VAT) on cooking gas will reverse gains made in weaning households off dirty fuel, energy sector players have said.

The stakeholders, among them the Energy and Petroleum Regulatory Authority, said a more expensive liquefied petroleum gas (LPG) would push many households to biomass sources like wood and charcoal.

The Treasury has proposed to reclassify LPG from zero to standard-rated supplies under the Finance Bill 2020, which the National Assembly published on May 5.

EPRA director-general Pavel Oimeke said the proposal, which is still open for comments would lead to an increase in pricing and lower uptake of cooking gas, which still lags at 30 percent.

“Should the proposal be approved, the effect is that LPG retail prices will increase consequently resulting in the use of alternative sources of energy by a section of the market. Nevertheless, the EPRA will continue sensitising consumers on the health and environmental benefits of using LPG to sustain the drive towards LPG growth in Kenya,” he told the Business Daily.

The Energy ministry, in a recent survey that found close to 75 percent of households still rely on wood and charcoal to cook, recommended more effort to push for a clean cooking solution to save the environment and improve health.

Energy secretary Charles Keter told the November 2019 Clean Cooking Forum reducing Household Air Pollution (HAP) brought about by cooking using inefficient cooking solutions remains a key health risk to populations, which needs to be addressed by faster uptake of clean cooking solutions in the country.

“Using clean cooking solutions will support the move by the government to restore Kenya’s forest cover to 10 percent up from the current seven percent.

“It is expected that clean cooking will reduce the country’s annual disease burden attributed to HAP from 49 percent (21,560) to 20 percent,” said Mr Keter during the forum attended by representatives from 50 countries.