Treasury Cabinet Secretary Ukur Yatani has announced plans to revive the stalled subsidy scheme for affordable cooking gas from July, promising relief to families hit by record-high LPG prices following the Russian invasion of Ukraine.
Ukur said he listed the cooking gas distribution scheme as a priority public investment under infrastructure development in the next financial year starting July.
“Over the next three fiscal years, the government will strengthen…distribution of 300,000, six-kilogramme liquefied petroleum gas (LPG) cylinders to low-income households,” Ukur Yatani in the Budget Policy Statement.
The cooking gas subsidy scheme initiated by the Ministry of Energy during the 2016/2017 financial year was aimed at cutting reliance on environment-unfriendly kerosene and charcoal, which are widely used in most rural and urban poor households.
However, the implementation was hampered by some suppliers providing faulty cylinders and distribution challenges at the State-owned National Oil Corporation (Nock), which was to drive the programme.
The draft Budget Policy Statement for the year starting July now shows that the Treasury expects to fund the supply of at least 300,000 cylinders. This is, however, only a small percentage of the target of three million that was outlined in the initial plan.
The price of cooking gas jumped 48% over the last year hitting an eight-year high of Ksh 2,978 for the 13-kg cylinder. The exclusive club of suppliers attributed the rise to a tight grip on the market as it takes advantage of new taxes to push up costs.
The price of cooking gas has gone up by almost Ksh 1,000 since January last year, more than triple the 16 per cent value-added tax (VAT) introduced by the government on the commodity.
The current LPG prices were attributed to the Russia-Ukraine war coupled with the government imposing the 16% VAT on the commodity at the beginning of the year.
Under the initial subsidy scheme, the beneficiaries were to pay a discounted price of Ksh2,000 in three years for the burner and cylinder, with refills pegged at Ksh840 at the time.
However, the Treasury did not disclose the extent of the subsidy in the revived plan.
