This archive report was first published on 10 June 2020.
On June 10, 2020, the Treasury announced a major cut to its cooking gas subsidy scheme, reducing the number of six-kilogramme cylinders from over three million to less than 200,000 due to tighter budget constraints.
The scheme, which was initially set to distribute more than three million cylinders at subsidised rates, has been scaled back significantly. According to Petroleum Principal Secretary Andrew Kamau, the project is set to resume in late July with suppliers distributing around 60,000 cylinders.
Mr. Kamau stated that the scheme's initial supply of about 100,000 cylinders had only 28,000 in circulation, indicating a significant reduction in the number of cylinders being distributed.
Despite the reduction, Mr. Kamau expressed optimism that the mission to increase LPG usage is still possible, citing the stimulation of private sector interest in the distribution of affordable LPG using innovative means like pay-as-you-go models.
The Treasury's budget for the scheme has been reduced from Sh3 billion in the financial year 2016/17 to Sh370 million in the current financial year, with a proposed further reduction of Sh130 million.
The scheme was previously halted by the High Court in 2018 due to the supply of substandard gas cylinders by contracted manufacturers. An audit and inspection were ordered, which are expected to be completed by an independent contractor in mid-July 2018.
