This archive report was first published on 12 June 2020.
As of July 1, households will face a significant increase in cooking gas prices, with the 13-kilogramme retailing between Sh2,400 and Sh2,508, up from the current range of Sh2,100 to Sh2,200.
The Treasury's decision to introduce a 14% value-added tax (VAT) on liquefied petroleum gas (LPG) has sparked concerns that the new tax will push cooking gas out of reach for many households struggling with depressed incomes.
Treasury Cabinet Secretary Ukur Yatani stated that the Finance Bill, which includes the new tax measures, is expected to become law by the end of June, paving the way for the new taxes to take effect when the new financial year starts.
Kenyan households have enjoyed low cooking gas prices since June 2016, when the Treasury scrapped the tax on LPG to cut costs and boost uptake among the poor who rely on dirty kerosene and charcoal for cooking.
However, the introduction of the 14% VAT cuts short the anticipated fall in cooking gas costs following the fall in global prices of crude oil due to the coronavirus pandemic.
With the LPG prices not controlled, like other petroleum products, fears are growing that dealers could exploit market forces to their advantage, even as international crude prices continue to fall.
