Subsidised gas plan for the poor put on ice
A plan by the Government to migrate more than four million poor households to the cleaner liquefied petroleum gas (LPG) has been suspended.
State-owned National Oil Corporation of Kenya (Nock) said the programme, which was on a pilot basis in Kajiado and Machakos, has been put off due to challenges in distributing the cheap gas cylinders, with some households irregularly taking more than one cylinder.
Why you could pay more for cooking gas
In other instances, families that already have gas cylinders or can comfortably afford them were signing up for the cheaper alternative. The project aims at distributing 4.3 million cylinders over three years. Nock Chief Executive MaryJane Mwangi said the State-run oil marketing company is evaluating modalities that will ensure that the Mwananchi Gas Project benefits the intended people as well as weed out double registrations.
“We did two pilots last year in Kajiado and Machakos, but the project was stopped temporarily because we realised there was double registration with people trying to get more than one cylinder. Gas cylinders are ordinarily a hot cake so for this particular product that is being sold at a half price, it was more attractive,” she said.
The six kilogramme gas cylinder branded Gas Yetu plus cooking gas was retailing at Sh2,000, which is more than half the Sh5,000 market price. Refills would cost Sh840 against the over Sh1,000 that it costs to refill other 6kg cylinders.
The initiative is aimed at reducing the cost of acquiring cylinders, which has been cited as a major barrier for households that are willing to make the switch from charcoal and kerosene to LPG.
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The prices of kerosene and charcoal have gone up substantially due to fluctuations of the fuel in the international market and currency volatility.
The price of charcoal has also almost doubled over the last year after the Government banned logging in February this year in an effort to save the country’s fast disappearing forest cover.
After the ban, a surge in charcoal imports from Uganda also alarmed Kenya’s neighbour, which has since banned exports to Kenya. Nock distributed 6,000 cylinders against the over a million it had planned to distribute during the project’s first year.
Ms Mwangi said the firm would soon embark on implementing subsequent phases of the project and would this time round use technology to avoid the mishaps experienced during the pilot phase.
National Oil is now in a healthy cash flow position: MaryJane Mwangi
“We have partnered with Jambo Pay in employing technology to identify the right beneficiaries beforehand,” she said. Treasury allocated Sh3.1 billion for the project this financial year and another Sh2 billion in the upcoming 2018/19 financial year.