Reprieve for households as cooking gas prices drop

Cooking gas

A trader displays cooking gas cylinders. 

Photo credit: File | Nation Media Group

Cooking gas prices have reduced two weeks after the government lowered tax, handing households a reprieve from the high retail prices over the past year.

A spot check by the Nation of retail stations shows they have cut the price of refilling a six-kilogramme cylinder of liquefied petroleum gas (LPG) by about Sh100, and the 13kg cylinder for most gas brands by Sh200.

A dealer at Roysambu, Nairobi, was refilling the 6kg cylinder of Pro Gas at Sh1,500 down from Sh1,600, and the 13kg cylinder of the same brand at Sh3,000, from Sh3,200.

A new pricelist guide at a National Oil Corporation of Kenya outlet at Agip along Haile Selassie Avenue, Nairobi, for its outlets across the country shows the company is refilling a 6kg cylinder of Supa Gas at Sh1,400 and the 13kg cylinder at Sh3,050.

An attendant at the station said prices have reduced over the past few days and they regularly update the pricelist whenever there is a change. “I put up the new pricelist recently when the prices reduced. The small gas cylinder was retailing at Sh1,500 and the large one at Sh3,250.”

The price cuts come after the enactment of the Finance Act, 2022, which lowered the value-added tax on LPG from 16 to eight per cent, handing a much-needed relief to households that bear the brunt of the rising cost of living.

Energy and Petroleum Regulatory Authority director-general Daniel Kiptoo last week said he was expecting retailers to lower prices gradually. The authority does not regulate cooking gas prices; hence dealers have the latitude to price according to market dynamics.

Mr Kiptoo said the construction of a common user facility will ensure certainty in the cooking gas market as it will allow the government to control gas prices.

The significant cut comes a year after Parliament reinstated the 16 per cent VAT on cooking gas, which together with the rally in crude prices, has seen the cost of the 13-kg LPG rise by Sh900 since June last year.

Cooking gas retailers had not immediately lowered their prices following the coming into effect of the Act which the energy regulator explained could be due to the dealers disposing off old LPG stock that was bought before the tax cut.

The state-owned Kenya Pipeline Company (KPC) is set to build an LPG storage facility at the Kenya Petroleum Refineries Ltd (KPRL) in a move to streamline the importation of cooking gas into the country.

Cooking gas is currently imported by private players which gives them ability to set its prices, but a common user facility will enable LPG to be imported through the open tender system (OTS) where firms will compete to import the cheapest LPG.

“The common user facility will help us to regulate the market because at the moment the LPG industry is driven by market dynamics,” said Mr Kiptoo.

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