Economy

Treasury cuts 6kg gas cylinders 84pc on tighter budget

gas

Petroleum PS Andrew Kamau. FILE PHOTO | NMG

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Summary

  • The scheme that initially targeted to distribute more than three million six-kilogramme cylinders at subsidised rates has had the numbers reduced to less than 200,000 over budget cuts.
  • The Treasury began slashing the project whose initial budget was Sh3 billion in the financial year 2016/17 when it was reduced to Sh1 billion.
  • In the year starting July when the programme rolls out, the Treasury had allocated Sh370 million but has proposed to reduce the allocation by another Sh130 million

The State has cut the number of cooking gas cylinders under its subsidy scheme by 84 percent even as the project is set to resume next month.

The scheme that initially targeted to distribute more than three million six-kilogramme cylinders at subsidised rates has had the numbers reduced to less than 200,000 over budget cuts according to Petroleum Principal Secretary Andrew Kamau.

Mr Kamau told the Business Daily that the scheme set to resume in late July will see the suppliers distribute some 60,000 cylinders after the initial supply of about 100,000 of which just 28,000 are in circulation.

“We have given it a good start and with the funding that we have, we will have just about 200,000 distributed. The mission to increase LPG (liquefied petroleum gas) usage is still possible because we have stimulated enough private sector interest in the distribution of affordable LPG using innovative means like the pay-as-you-go models now in the market,” he said.

The Treasury began slashing the project whose initial budget was Sh3 billion in the financial year 2016/17 when it was reduced to Sh1 billion. In the year starting July when the programme rolls out, the Treasury had allocated Sh370 million but has proposed to reduce the allocation by another Sh130 million

The scheme was stopped by the High Court in 2018 after contracted manufacturers supplied the government with substandard gas cylinders, prompting an audit and inspection, which the court ordered to be done by an independent contractor.

The contractor is said to have started the inspection last month and is expected to conclude in mid-July 2018 before the National Oil rolls out the subsidised cylinder plan.

The flagship project designed to offer poor homes cheaper cooking gas was also hijacked by a private sector cartel who saw it as a threat to their LPG monopoly in the market with reports that some of the cylinders were stolen and rebranded into different cooking gas brands.

The fraudulent contractors who supplied 67,251 faulty gas cylinders are still expected to complete the supply to National Oil Corporation of Kenya under the inspection of a government-contracted verifier who will check them for quality compliance to safeguard users from harm.