15 October 2017

Kenya: State Cuts Cooking Gas Cylinder Price 70% in Sh3 Billion Plan

Poor homes will now acquire 6kg gas cylinders with cooking accessories at a discounted price of Sh2,000, down from about Sh5,000, under a government subsidy plan aimed at cutting reliance on kerosene and charcoal.

The cylinders, dubbed Gas Yetu, will be distributed to the poor across the country by State-owned National Oil.

Under the plan, which has been piloted in Machakos and Kajiado counties, the Ministry of Energy will buy about one million new cylinders for distribution.

"This campaign is meant to increase the uptake of cooking gas by low-income households," National Oil CEO MaryJane Mwangi said.

The company sells a complete 6kg cylinder of its flagship SupaGas brand at about Sh5,000. The equivalent cylinder of the new Gas Yetu brand at Sh2,000 is set to be a game changer in weaning poor homes from the use of firewood, charcoal and kerosene for cooking.

The Treasury initially allocated the Energy ministry Sh2.2 billion for the programme and later added it Sh700 million in a mini-budget, pushing the total to Sh3.1 billion.

The Treasury in July last year scrapped value added tax (VAT) on cooking gas to cut costs and boost uptake, but poor homes have continued to find the prices prohibitive.

Gas has become the preferred energy source for households that can afford it 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.

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

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

Kenya

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