Subsidy gas plan for poor families gets Sh1.5bn more


Cooking gas cylinders for sale. FILE PHOTO | NMG

Kenya will buy half a million more six kilogramme (kg) gas cylinders with cooking accessories that will be sold to poor homes at a discounted price of Sh2,000, down from about Sh5,000 after Parliament increased allocations for the subsidy plan to Sh4.5 billion.

The Budget committee has increased allocation by Sh1.5 billion for the year starting July from the Sh3 billion that Treasury had set aside for purchase of one million cylinders.

The plan is aimed at cutting reliance on kerosene and charcoal.

The cylinders, dubbed Gas Yetu, will be distributed to the poor across the country by State-owned National Oil.

“We are targeting homes that use firewood, kerosene and charcoal for cooking,” said Andrew Kamau, the Principal Secretary in the Petroleum ministry. 

“The completed pilot will inform the rollout that is intended to increase the uptake of cooking gas by low-income households.”

In May Kenya temporarily shelved its plan to provide cheap cooking gas to millions of poor households after the pre-qualified supplier delivered unsafe 6kg cylinders.

The Ministry of Energy and Petroleum confirmed that a consortium led by Allied East Africa Ltd, a Kenyan firm contracted to supply the government with the initial 300,000 Gas Yetu cylinders, provided defective appliances that are risky to the consumers.

This comes at a time when gas prices are on the rise in line with increasing petroleum costs.

Cooking gas is trading at levels seen before the government removed value added tax (VAT) on the clean fuel.

Official data shows that the cost of refilling a 13-kg gas cylinder rose to an average of Sh2,164 last month.

Prices stood at an average of Sh2,231 in June 2016, and dropped to below Sh2,000 in October, four months after the scrapping of the 16 per cent VAT.

Gas has become the preferred energy source for households that can afford it in major towns, due to its convenience and because it is cleaner than other cooking fuel.

Industry data shows that gas consumption jumped 25 per cent last year to 189,300 tonnes from 151,700 tonnes last year and 93,000 tonnes in 2013.

The VAT removal was part of the government’s plan to wean rural homes off reliance on toxic firewood, kerosene and charcoal.

Unlike petrol, diesel and kerosene, cooking gas prices are not regulated by the Energy Regulatory Commission and have been left to market forces.

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