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Energy dealers oppose new levies by Nairobi county

Energy dealers have protested a raft of proposed new levies by the Nairobi County government, saying the new charges will adversely affect their operations in the capital city.

The traders, in a petition to Nairobi County Assembly, raised concerns that the new levies targeting the liquefied petroleum gas (LPG) sector will only lead to the closure of most of establishments dealing in the product.

The proposed levies, contained in the Nairobi City County Finance Bill, 2020, include new charge of Sh6,000 per annum for retailers for storing inflammable materials for LPG gas sellers and own use as well as the proposed small-scale gas sellers flat rate charge of Sh30,000 up from Sh4,500 in 2018.

Others are a new Sh100,000 charge, up from Sh25,000 in 2018, for LPG refilling plants as well as Sh4,500 fire licence certificate fee.

Energy Dealers Association (EDA) Secretary General Kepher Odongo termed the proposed levies as punitive and will be more than detrimental to an already ailing sector.

Mr Odongo complained that the new fees mean small-scale LPG traders will pay in excess of Sh40,000 in total for licences, putting further strain on an already shrinking business environment occasioned by Covid-19 pandemic.

“As energy dealers association operating in Nairobi County, we are greatly perturbed by some of the proposed levies. The trickle-down effects will definitely be closure of establishments already dealing in LPG distribution, leading to investments and job losses,” he added.

The secretary general explained that city residents who are already suffering due to hard economic times will be pushed further into deeper financial woes by the new proposals as the traders will definitely pass on the costs to their end consumers.

This, he said, will have negative effects on the gains made on sustainable and clean energy use as many people will opt to revert to use of cheaper non-efficient energy sources including firewood, charcoal and paraffin negating global efforts to move populations towards clean energy sources.

“This goes against the global trend where governments are supposed to give more incentives to aid in the transition to clean and green energy use,” Mr Odongo concluded.