Cooking Gas Prices to Reduce as VAT on LPG Drops to 8%

Members of parliament on Thursday proposed a further VAT slash on liquefied petroleum gas to 8 percent from the current 16 percent, a move that will see the prices of the commodity lower. This is a relief for many households who rely on domestic cooking gas, which has already hit a record high.

The move by Members of Parliament is in line with the Petroleum Products Amendment Bill 2021 passed by the National Assembly Committee on Finance and National Planning. Approval of the proposal will see the price of the 13-kilogram cooking gas fall by at least 230 shillings.

Last month the government imposed new taxes on imported LPG by more than 38,000 shillings while increasing levies from $605 (70,000 shillings) per ton of LPG to $930 (108,000 shillings) per ton of LPG. This saw the price of 6 kg cylinder retailing at 1200 shillings jump to 1500 shillings and 13kg cylinder to 3500 shillings from between 2866 -3000 shillings.

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LPG is the second most used cooking fuel in Kenya, with 23.9 percent of households, behind firewood, which is used by 55.1 percent.

The high cost of living driven by the spike in the price of common goods continues to impact Kenyans who are already sailing in poverty negatively. Many households have reduced their shopping basket on non-essential commodities; as a result, they are ditching their usual ways of living.

The country’s inflation rate jumped to 7.1 percent in May of 2022, from 6.47 percent in April 2022. This is the highest reading since February 2020, as the cost of food products continued to rise sharply at 12.4 percent compared to 12.2 percent in April 2022.

The monthly budget continues to narrow every day due to the increased commodity prices just a few months before the general elections. Businesses have also been hit, given that the purchasing power has reduced while some have already closed.