Kenya bets on gas cylinders subsidy to drive sales

The Ministry of Energy and Petroleum is in plans to subsidise the cost of gas cylinders to increase access in addition to boosting the use of the liquefied petroleum gas.

Andrew Kamau Principal Secretary for Petroleum said the ministry is currently evaluating the mechanisms of implementing the project that is geared at increasing the number of households using cooking gas.

He said high cost of gas cylinders has limited the number of people using the cleaner and relatively affordable fuel for cooking and lighting. He added that there are plans by the Kenya Pipeline Company (KPC) to put up LPG handling facilities, with a view of increasing the capacity in the country.

“One of the key initiatives in the next three years is to convert people from kerosene, wood fuel and charcoal to use of gas. KPC is in plans to build a 20,000 LPG storage in Mombasa and after that build storage facilities across the country,” explained Kamau.

HUGE UPTAKE

“The Government has also set aside some money to buy gas cylinders for low income households... which they can pay back over time. One of the things why LPG has not had a huge uptake is the cost of cylinders... it’s a big upfront payment and If we can bring this to an affordable level, we can see more people using LPG.”

“When the cost of cylinders is manageable and we have huge storage facilities, which can help us, leverage on economies of scale, then I think we can get more households to use LPG.”

Data from the Kenya National Bureau of Statistics (KNBS) indicate that Kenyans used 148,000 tonnes of LPG last year, a slight drop compared to 149,000 tonnes used in 2014. The country has over time grappled with how to increase usage of the otherwise cleaner LPG, compared to wood fuel, charcoal and kerosene. Kamau spoke yesterday during the East Africa Oil and Gas Summit, which started Tuesday and comes to a close today.