Cushion users from spiralling gas prices
A consistent increase in the cost of cooking gas (LPG) has put the country at a crossroads as both policy makers and consumers now hold the short end of the stick.
For policy makers, attempts to lower the price of the commodity for the sake of a safer, environment friendly and affordable means of cooking to kick out dirty alternatives, has come a cropper.
The government’s attempt to encourage displacement of biomass and kerosene in households with LPG has gained traction, and in recent years has been a success.
Consumption of LPG had tripled from 2014 to about 124,000 metric tonnes in 2017.
Rapid growth continued with demand nearly doubling again to 217,000 metric tonnes. The Covid-19 pandemic, however, interrupted this trend in 2020.
The steep increase in the prices of both LPG and kerosene, which is also used by low-income households, will definitely increase appetite for cheaper sources such as firewood and charcoal against government’s conservation efforts.
Gas prices surged further on Monday when marketers announced latest changes, spelling even higher cost of living for Kenyans while raising concerns that the Central Bank might start raising the cost of loans earlier than anticipated.
Top oil marketer Rubis Energy has already signalled that cooking gas, whose prices are not regulated by the government, will rise by more than 30 per cent.
The oil marketing firm says the cost of a 13-kilogramme cylinder will rise to Sh3,340 from a low of Sh2,300 a few days ago, while the 6kg cylinder will increase from Sh1,200 to Sh1,560.
While the war between Russia and Ukraine is currently the main reason given for the surge, it is important to note that the cost has been rising gradually since 2019.
Fears abound that the new prices could even escalate the Central Bank target inflation, pushing it beyond the median of 5 per cent, but not above the 7.5 per cent limit.
This will see poorer Kenyans foregoing important needs in order to spend on cooking gas and fuel in general as the fighting in eastern Europe escalates in the coming days.
It is time for policymakers to consider less punitive ways of making money in this sector and cushion users.
Otherwise by making gas more expensive, the national Treasury should prepare to increase the health budget from resultant opportunistic diseases, that the use of LPG was meant to cushion consumers against.