Lessons from LPG subsidy programme

LPG vendor. Efforts to bring the solid fuels group to LPG use saw the government launch a subsidised LPG project, “Gas Yetu”. FILE PHOTO | NMG

What you need to know:

  • Efforts to bring the solid fuels group to LPG use saw the government launch a subsidised LPG project, “Gas Yetu”.
  • Obstacles with cylinder inter-exchangeability and dwindling fortunes at National Oil the implementer(u1) are noted.
  • With global oil prices plummeting, a big reduction in LPG cost is noted.

Last week saw social media chatter on sightings of Mt Kenya and Kilimanjaro from Nairobi. No doubt due to improved air quality, a by-product of the curfews. With households now cooking three meals daily, indoor air pollution for urban low income groups who cook with charcoal or kerosene is high. Statistics show over 75 percent of Kenyans cook with solid fuels.

For environmentalists and medics, indoors air pollution is relevant, not just because 40 percent of childhood deaths are attributed to respiratory illnesses, but also because both coronavirus and carbon-monoxide are associated with altered functioning of the haemoglobin moiety, a crucial component of human physiology blood- oxygen transport.

Efforts to bring the solid fuels group to LPG use saw the government launch a subsidised LPG project, “Gas Yetu”. Obstacles with cylinder inter-exchangeability and dwindling fortunes at National Oil the implementer(u1) are noted. With global oil prices plummeting, a big reduction in LPG cost is noted. A 6kg cylinder (accounting for three quarters of size demanded), retails from Sh650 to Sh780, depending on brand and your location

Here’s why Covid-19 offers a chance to finally overcome these earlier barriers faced

Gas Yetu’s rollout could borrow lessons from “Medical Access Programmes”. In healthcare, these are designed to help patients who cannot afford care or drugs to also benefit, particularly for chronic conditions. Our thinking, short term support can ultimately be weaned off once the patient’s health and socioeconomic status improves, ensuring healthier, longer lives.

The LPG subsidy shares almost identical challenges and target demographics. Just like our pharma world, “The top five of Kenya’s 44 licensed LPG dealers accounted for about 80 percent of the market.” In healthcare, however, we now understand that market dominance protectionism, stifles growth for all. The local LPG “Top Five” should see that bigger market volumes benefits them too.

The second lesson is, suit the product to the right consumer, not the entire market. Not everyone will benefit at once. Effort is best spent adding steady, smaller user-streams in thousands at a time who will fully embrace LPG cooking, than a million, 95 percent of whom are not ready.

The third lesson is that reduction of implementation costs is crucial but fixing this requires time.

In healthcare, every logistics chain level is responsible for an extra cost to the beneficiary. Time and funds invested to innovate around reforming long logistics and supply chains is necessary. With eight percent of Kenya’s LPG imported from Tanzania and about 90 percent through Mombasa, beneficiaries close to these two would be easier and cheaper on-boarded. Grab low lying fruits first

Finally, access programmes have patients, providers and funders. For Gas Yetu, Cofek LPG vendors and the government must align?

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Statistics from Kenya’s Strategy to Make Liquefied Petroleum Gas the Nation’s Primary Cooking Fuel report.

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Note: The results are not exact but very close to the actual.