Kenyans protest sharp rise in cooking gas prices
If Kenyans were concerned that the recent sharp increase in the cost of essential commodities had made life difficult, then it is about to get worse.
The price of cooking gas, the main energy source in millions of homes, has gone up by up to 30 per cent.
Unlike other fuels which are regulated and users cushioned from price increments, cooking gas is not under government regulation.
Top oil marketer Rubis Energy has indicated that the retail prices for the 13kg cylinder will rise from Sh2,700 to Sh3,340. The cost of the 6kg cylinder has increased from Sh1,200 to Sh1,560, jolting the low-income earners whose energy and food prices take the largest proportion of their income.
“The prices have increased by about Sh250 for the 6kg cylinder and over Sh500 for the 13kg cylinder,” said Michael Kangethe of Door Step gas on Thika Road in Ruiru.
Cooking gas dealers in Nakuru County have also reviewed their prices upward amid protests by consumers.
A spot check at retail shops in the city’s CBD revealed that dealers were adjusting the prices between Sh200 and Sh500 depending on the size of the container.
“We have reviewed prices and the 6kg cylinder will be refilled at Sh1,500 from Sh1,390, the 13kg cylinder will be refilled at Sh3,200 from Sh2800,” said Hassan Ali, a dealer at Oginga Odinga street.
Susan Kimani, a consumer, protested the increase saying the timing was wrong as children have closed schools meaning there will be a lot of cooking.
“I am shifting to charcoal. I cannot sustain buying an LPG at these prices,” said Kimani.
Residents of Mombasa called for government intervention to tame the rapidly rising cost of cooking gas.
Charcoal alternative
Residents said firewood and ethanol cookers were now the only affordable options.
“I stopped using my gas cooker because it’s too expensive. I only use it as an emergency. These days I cook using charcoal,” explained Tabitha Kamathe, a resident of Mkomani.
Florence Murage, a businesswoman in Kongowea, also said she had resorted to charcoal.
“I was shocked to realise that the prices had shot from Sh2,000 to Sh2,900 for a 13kg gas in just two months and I am told now it’s going to be worse. I had to look for an alternative which is charcoal. It’s not like we love the smoke from charcoal but we are being forced by circumstances. Everybody loves clean energy,” she said.
Gas dealers in Mombasa say they have lost many clients because of the high costs.
Mercy Wangui says she received a message from Sea Gas and Rubis indicating new retail prices will be Sh1,560 up from Sh1,300 for 6kg gas cylinders and Sh3,340 for 13kg up from Sh2,800.
“Sales have gone very low since the prices started going up,” she said “I fail to understand what has triggered the sudden rise of prices because initially, the government had told us that they wanted to decrease the cost of gas to make it affordable and encourage the use of clean energy. I remember when Sea Gas came, it was very cheap and when we asked why they told us that they wanted to reach the common mwananchi. Today, we asked why they are increasing the price but they have no answers.”
Rising inflation
David Otieno, a gas dealer at Kwa Karama area of Nyali, is concerned that the constant increase of prices had cost them the trust of many clients.
“If you increase the price from Sh1,100 this week to Sh1,200 next week and Sh1,300 the following week even the clients will start doubting the trend. This is why their clients are seeking alternatives and this is costing us the business,” said Otieno.
The case is the same in Kisumu where John Omondi, who sells gas at Airport, confirmed the prices had gone up.
An analyst at Sterling Capital says the new prices could even push the Central Bank of Kenya (CBK) target inflation beyond the median of 5 per cent but not above the 7.5 per cent limit as the cost of living soars.“We expect that Kenyans will have to forego other important needs to spend on cooking gas and generally the rising fuel prices,” said Reinado De Souza, head of research of Sterling Capital.
De Souza said it is unclear how the government will cope with the rising oil prices if it is to continue subsidising energy prices.
“We think the Central Bank will start looking at the base lending rate for a possible review earlier than anticipated given that oil prices are also on the rise,” said De Souza.
The current changes in prices are the result of rising oil prices on the international market as the Russia-Ukraine war continues unabated.
Yesterday oil prices surged to a near all-time high of $140 a barrel after the US said it was considering banning Russia’s oil exports to Europe and other countries.
On Sunday, the US Secretary of State Antony Blinken said the Joe Biden administration and its allies were discussing an embargo of Russian oil supplies.
UK petrol prices hit an average of 155p a litre, the AA motoring group said.
The market turmoil is fuelling concerns that the price of many everyday items from food to petrol and heating, already rising at their fastest rate for 30 years, could be pushed higher.
Interest rates
LPG is a by-product of crude oil, hence the prices vary with changes in the prices of crude oil.
The demand for LPG has grown rapidly in Kenya as the government moved to reduce reliance on firewood by providing incentives such as subsidised cylinders.
This has attracted multi-billion investment in LPG storage facilities in Mombasa and Nairobi to cash in on the heavy demand.
High population growth and rising economic gains have boosted the sector but the high seasonal prices could hit demand as more Kenyans fall back on firewood and charcoal. Kenyans are already battling high cost of living due to high costs of petrol and diesel which the government is partially subsidising.
The high oil prices also mean that the government will have to fork out more money to subsidise oil prices or else pass the price increase to consumers. The high-energy prices could force the Central Bank to start raising interest rates earlier than expected.
- Additional reporting by Roy Lumbe, Viola Kosome and Reuben Mwambingu.
