Cooking gas price controls loom as storage hub built

Cooking gas cylinders for sale. FILE PHOTO | NMG

What you need to know:

  • The Mombasa-based storage facility with a 20,000-metric tonne capacity is set for completion next month.
  • The gas price regulation would be similar to the one introduced on diesel, petrol and kerosene costs in 2010.
  • The State plans a campaign in which six-kilogramme cooking gas cylinders with burner and grill will be sold to low-income households at a discounted price of Sh2,000 down from Sh5,000.

Kenya is on course to start imposing price controls on cooking gas with the near completion of the LPG storage and handling facility that will allow bulk importation of the fuel.

Petroleum secretary John Munyes said the Mombasa-based storage facility with a 20,000-metric tonne capacity will be completed next month.

The gas price regulation would be similar to the one introduced on diesel, petrol and kerosene costs in 2010.

“LPG facility investor, Agol (African Gas and Oil Ltd) is in the final stages of construction of the facility and another facility is planned by Kenya Pipeline Company,” he said.

Mr Munyes said the shift to price control regime would result in lower consumer prices and boost uptake, especially among low-income earners.

The common user gas storage facility will enable the ministry to issue 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.

The minister said the State would launch 40 mini-LPG storage and refilling plants across Kenya that women and youth groups will operate.

The ministry also plans a campaign in which six-kilogramme cooking gas cylinders with burner and grill will be sold to low-income households at a discounted price of Sh2,000 down from Sh5,000.

A 2011 law returned price controls of any essential commodity after the State abandoned the practice in the 1990s in favour of liberalised trade. However, Treasury Cabinet Secretary must first issue a gazette notice to declare any goods to be essential commodities and determine the maximum prices.

The government enforced the law in May when it capped flour prices at Sh90.

Cooking gas has become the preferred energy source for households in major towns due to its convenience and cleanliness.

Oil marketers have advocated more rigorous checks on unlicensed gas operators who they accuse of undercutting the market through irregular refilling.