Low cooking gas prices hand Kenyans boon

Liquefied petroleum gas (LPG) prices in Kenya have dropped to a six-year low driving consumption and sales for dealers.

The traders, who a few months ago were finding it hard to sell the commodity, are now struggling to keep up with the increased demand.

A 13kg LPG (cooking gas) cylinder is currently being sold at between 19 U.S. dollars and 21 dollars by independent gas dealers in various parts of the capital, Nairobi.

Oil multinationals, on the other hand, are selling the commodity from 22 dollars to 23.5 dollars, the lowest in many years.

The low prices mainly occasioned by cheaper oil crude prices in the global market have pushed up consumption, with many low-income earners dusting their cookers and refilling their cylinders with gas.

"Business was bad, really bad particularly last year but things started warming up in March. Consumption is now good and the cylinders are seemingly flying off the shelves," Abel Kariuki, a gas dealer in Donholm estate on the east of Nairobi said Sunday.

Kariuki is selling a 13kg cooking gas cylinder at 19 dollars and a 6kg one for 8 dollars, down from 23 dollars and 11.5 dollars months ago.

"In the first three months of this year and the better part of last year, I would bring in about 12 cooking gas cylinders and a month would end without me evening selling half. People were not buying the gas," he said.

Last month, however, Kariuki sold 20 cooking gas cylinders, a feat that seemed unreal for the trader who has been in the business for about four years.

Latest government data paints a rosy picture on the use of cooking gas by citizens, thus a better tiding for traders, as prices drop.

According to the Kenya National Bureau of Statistics, Kenyans are now consuming an average of 6,000 metric tonnes (MT) of cooking gas a month, up from 4,000MT.

The cooking gas outlook for both consumers and traders in the East African nation is positive if recent events are anything to go by, according to Nairobi-based economics lecturer, Henry Wandera.

The budget, presented on June 8 by Treasury Cabinet Secretary Henry Rotich in parliament, removed value added tax on LPG that was reintroduced in 2013.

"The removal of the 16 percent tax would bring down the cost of the commodity further as dealers complete their current stocks, handing consumers a big gain," said Wandera.

On the other hand, the government introduced a 15.3 percent tax on kerosene, pushing up the cost to prevent the use of the fuel and making consumers go for LPG. Endit