Reprieve for homes as cooking gas prices fall

A man walks past cooking gas cylinders displayed for sale in Ukunda, Kwale County. FILE PHOTO | NMG  

By NEVILLE OTUKI

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Summary

• Refilling a 13-kilogramme cylinder stood at an average 2,073 in July, down from Sh2,112 a month earlier.
• The prices tanked below Sh2,000 last year July after the Treasury scrapped value added tax (VAT) on cooking gas to cut costs and boost uptake among poor households.
• But it rose again past Sh2,000 for a 13-kg cylinder in April, maintaining an upward trajectory in the months that followed before dropping in July.

Cooking gas prices have dropped for the first time since March, offering further reprieve to homes enjoying falling food prices.

Refilling a 13-kilogramme cylinder stood at an average 2,073 in July, down from Sh2,112 a month earlier, where it had touched the highest level this year. 

July’s drop is the first since March when it has been increasing monthly from an eight-year low of Sh1,976 in February, to breach the Sh2,000-mark, piling fresh pressure on homes, the Kenya National Bureau of Statistics (KNBS) data shows.

The prices tanked below Sh2,000 last year July after the Treasury scrapped value added tax (VAT) on cooking gas to cut costs and boost uptake among poor households.

This made the commodity one of the few bright spots more recently in a tough economy characterised by rising food and fuel prices.

But it rose again past Sh2,000 for a 13-kg cylinder in April, maintaining an upward trajectory in the months that followed before dropping in July.

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

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

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

READ: Cooking gas falls to eight-year low after Rotich tax reprieve

Oil marketers have, however, been pushing for more rigorous checks on unlicensed gas operators, whom they accuse of undercutting the market through irregular refilling.

Through the Petroleum Institute of East Africa, the marketers claim that over half of gas cylinders in the market are illegally refilled, posing danger to users.

This most recently saw Ministry of Energy officials impose a ban on cheaper gas imports from Tanzania through land border due to failure to meet safety standards.

READ: Tanzania raises concern over Kenyan ban on cooking gas imports

Kenya has since lifted the ban after signing mutual trade agreements with Tanzania.