Energy Ministry
The Energy Regulatory Commission

Time for cheaper gas is now long overdue

EDITORIAL: Time for cheaper gas is now long overdue

LPG is currently retailing at Sh2,300 for a 13 kilogramme cylinder while a six-kilogramme cylinder refill price averages Sh900. FILE PHOTO | NMG

The sharp rise in cost of charcoal and kerosene over the past year has renewed calls on the need to deliver cheaper gas through regulator price control. The price of charcoal rose 70 per cent last year, driven by limited supply, increased demand and a rise in the price of cooking gas, which has defied the fall in crude oil prices.Cooking gas prices have shot to a 27-month high of an average of Sh2,190 in December, returning to levels last seen before the government removed value added tax (VAT) on the clean fuel.It is likely that low-income consumers are giving cooking gas a wide berth to cling onto the use of charcoal, assuming it is more affordable due to availability in smaller packaging.Charcoal has twin burdens of pollution and environmental degradation, which should worry policy makers chasing after a healthier nation and taming climate change. This should push the government to think fast enough on how to come up with affordable cooking gas.The Energy Regulatory Commission (ERC) and the Energy Ministry must move forward the plan to impose price controls on cooking gas, similar to those introduced on diesel, petrol and kerosene costs in 2010.The ERC has delayed plans to control gas prices awaiting an upgrade of the LPG storage and handling facilities for issuance of single gas tender commonly referred to as the open tender system (OTS).Under the OTS, the Ministry will award one oil marketer the right to import gas in bulk every month on behalf of the entire industry, enjoying huge discounts, like is the case with diesel, petrol and kerosene cargoes.We must aggressively pursue this plan given the existence of the law to back control of gas prices. A 2011 law returned price controls of any essential commodity, after the practice was abandoned in the 1990s in favour of economic liberalisation. But the Treasury secretary must first issue a gazette notice to declare any goods to be essential commodities and determine the maximum prices.This happened in May 2017 when flour prices were capped at Sh90. It would be unacceptable to keep cooking gas beyond the reach of the poor and watch as people die of pollution and charcoal burners annihilate Kenya’s thin forest cover.

Please enable JavaScript to view the comments powered by Disqus.

Share this Post