Kenya sets aside 20 mln USD to boost LPG use

Kenya has set aside 20 million U.S. dollars in order to boost uptake of Liquefied Petroleum Gas (LPG) among households, a senior government official said on Sunday.

Ministry of Energy and Petroleum Permanent Secretary Andrew Kamau told a media briefing in Nairobi that part of the funds will be used to construct bulk LPG storage facilities in the major towns.

"Our aim is to increase LPG per capita consumption from the current two kg per person per year to 15 kg by the end of 2017," Kamau said.

The government plans to build a new jetty at the port of Mombasa to cater for LPG imports.

Kenya has exempted LPG from Value Added Tax in the 2016/2017 financial year while the taxes on locally produced LPG appliances was removed in the 2015/2016 financial year.

Kamau said that currently only the high and middle income consumers can afford to use LPG for household energy needs.

"Low income household still rely on kerosene, firewood and charcoal because LPG use involves high upfront costs," he said.

In order to consume LPG consumers have to purchase a LPG cylinder which is beyond the reach of the poor. "Over the long term LPG use is actually cheaper than other alternative sources of energy," Kamau said.

Petroleum Institute of East Africa (PIEA) Chairman Powell Maimba said that the high investment costs for setting up LPG facilities has led to the development of an illegal LPG sector.

"Unlicensed LPG operators are able to offer the product at half the market price and this has discouraged the development of the formal business," Maimba said.

He said that in order for Kenya to increase uptake of LPG, consumers should be able to easily access the product. "Around 65,000 outlets countrywide are required to ensure that every Kenyan can access the LPG," he said.

The chairman said that Kenya's reliance on charcoal, firewood and kerosene is responsible for 15,000 deaths annually. Enditem