.13Killogram Cylinder Cost KSh 3000 prior to tax cut.
.National Treasury Eliminated the 16% Value Added Tax
.The depreciation of the Kenyan shilling over the past year led to an increase in prices for cooking gas and fuel
Cooking gas prices have surged to over KES 3,000 for a 13-kilogram cylinder prior to tax cuts due to the weakening of the Kenyan shilling against the United States dollar.
To alleviate the financial strain on consumers, the National Treasury eliminated the 16% Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG) through the Finance Act of 2023. Consequently, the average cost decreased from KES 3,069 in June to KES 2,787 in July. Despite these tax relief efforts, the depreciation of the Kenyan shilling over the past year led to an increase in prices for cooking gas and fuel.
As a result, the benefits of tax cuts were mitigated, and prices began to rise again. According to data from the Kenya National Bureau of Statistics (KNBS), in December 2023, the average price for refilling a 13-kilogram cylinder of LPG reached KES 3,032, marking a significant 1.7% increase compared to the previous year.
This rise occurs as the government focuses on enhancing per capita LPG consumption to encourage the adoption of renewable energies. It has introduced the LPG Growth Policy to gradually transition the 70% of Kenyan households currently dependent on biomass, kerosene, and other non-renewable fuels for cooking towards cleaner alternatives.
Proposed interventions include establishing common-user LPG import terminals, distributing subsidized LPG cylinders to low-income households, promoting LPG use in institutions, and fostering partnerships with finance institutions, LPG players, and the ministries of Education and Health.
The Cabinet has emphasized that these measures aim to reduce consumer prices, enhance public safety, and contribute to both public health and environmental sustainability.
