Pressure on families as cooking gas prices set to increase
Households are set to pay more for liquefied petroleum gas (LPG) on increased demand for the commodity in Asia due to a potentially colder start of winter and higher heating requirements.
Energy and Petroleum Regulatory Authority (Epra) Director-General Pavel Oimeke said the global price of LPG increased by $25 (Sh2,752.5) per tonne between September and October.
“The price increase is as a result of the recovery of demand in India and Asia,” he said without indicating by how much LPG prices would increase on the Kenyan market.
Currently, the 13-kilogramme cooking gas retails at between Sh2,100 and Sh2,200.
However, Mr Oimeke said that per capita consumption of LPG in Kenya had increased from 2.2 kilogrammes in 2013 to 6.4 kilogramme last year.
“The increase is attributed to improved supply of LPG leading to higher penetration and also awareness creation on the benefits of LPG being one of the cleanest sources of domestic energy,” he said.
Mr Oimeke, however, said that there still exists tailbacks on LPG access, especially to the low-income households due to the high cost of appliances and the product.
In June, the Treasury sought to delay the implementation of a 14 per cent value-added tax (VAT) on cooking gas by at least one year to prevent MPs from scrapping the new levy from a Bill that would become law on July 1.
This was line with the Finance Bill 2020 that has now removed cooking gas from tax-exempt goods with the new VAT charge in what is set to push it out of the reach of most households struggling with depressed incomes in the wake of Covid-19.
Kenyan households have since June 2016 been enjoying low cooking gas prices after the Treasury scrapped the tax on LPG to cut costs and boost uptake among the poor who rely on dirty kerosene, firewood and charcoal for cooking.
The rise in the cost of cooking gas is expected to pile pressure on families that are struggling to foot daily bills due to job losses and drastic cuts in earnings in the wake of the coronavirus pandemic.