Tough times: Cooking gas price at all-time high

Cooking gas cylinders at a trading centre in Nakuru town. [Kipsang Joseph, Standard]

The cost of cooking gas has hit an all-time high. 

The rise is linked to the Russia-Ukraine crisis that has disrupted the supply of petroleum products in the world market.

The latest price hike adds to the pain among many households, with the local price of Liquefied Petroleum Gas having risen consistently over the last year.

The increase is attributed to many factors, key among them being the introduction of Value Added Tax.

Refiling a 13kg gas cylinder now costs Sh3,300 depending on the cylinder brand. 

Rubis Energy Kenya has revised retail prices to Sh3,340 for refilling a 13kg cylinder and Sh1,560 for a 6kg cylinder.

Energy experts say other than VAT on LPG, there is a rally in oil prices due to the supply hiccups. The war in Eastern Europe has resulted in oil prices rising to $130 per barrel, the highest since 2008. This is in addition to the surge in crude oil prices towards the end of last year.

A spot check on a number of retail outlets branded by major oil marketing companies showed a similar trend, with a 13kg cylinder refilling at about Sh3,200 on average, up from about Sh2,990 in January and February.

This is compared to Sh2,600 in November 2021, according to data by the Kenya National Bureau of Statistics, months after the introduction of the 16 per cent VAT on gas.

It is also in comparison to about Sh2,000 in January 2020, which means that in about a year, the cost of refilling a 13kg cooking gas cylinder has risen by 50 per cent.

With the price of cooking gas at a record high, the Kenyan consumer has been left with little or no affordable alternatives.

Kerosene, which has for years been viewed as the poor man’s cooking and lighting fuel, has also been on the rise, currently retailing at Sh103.54. Charcoal has remained out of reach for many Kenyans following a 2018 government ban on logging.

Both kerosene and charcoal are deemed dirty fuels due to the negative effect they have on human health and the environment. 

Consumer Federation of Kenya Secretary-General Stephen Mutoro said while there are factors that are beyond Kenya’s control, there are components of the retail price that the government can work on to reduce the cost.

He noted that taxes levied on petroleum products, LPG included, are largely to blame for pushing the cost to a point beyond reach.

“If there is commitment by the government to lower the cost then we need to have deliberate action that requires lowering taxes and levies on LPG,” Mr Mutoro said.

The Energy and Petroleum Regulatory Authority recently said it had advised the Petroleum Ministry and the National Treasury to consider doing away with VAT on LPG.

The energy industry regulator noted there are lined up investments that could result in the lowering of the cost of cooking gas but these will not offer relief in the short term.

These include the completion of the second Kipevu Oil Terminal that will be commissioned in the second quarter of this year and planned LPG storage facilities at the Kenya Petroleum Refineries Limited.

The two facilities are expected to offer LPG firms an easier, faster and cost-effective way to offload gas imported into the country, which is currently done through a private terminal that can only handle small vessels. Epra hopes the government-owned facilities will also enable it to regulate cooking gas as is the case with petroleum products.