NAIROBI, Kenya, May 15 — Households banking on President William Ruto’s promise of subsidized gas prices will have to wait longer for the actualization of new rates initially set for June.
President Ruto Monday said the promise he made in March while addressing women at an event to mark International Women’s Day could not be realized until the Finance Bill 2023, which seeks to drop taxes on cooking gas, is passed.
He suggested the promised Sh600 gas refills will only be possible in July.
“By 1st of June it’s impossible maybe after we pass the Finance Bill 2023 so that we can see whether we can reduce the prices. If we passed this in the Supplementary budget then it would have been possible by June but we tried and it was possible,” Ruto said.
The President stated that proposed changes in the Finance Bill 2023 will enable the Kenya Kwanza administration to fulfill the much-awaited reduction of gas prices.
“We have ensured that it’s in our budget and we have said we will take that money on revenue collection from Kerosene product to securitize the issue so that we reduce the prices of gas tanks,” said Ruto.
“We are a country governed by the rule of law and we will pass the law to allow us deliver on this promise,” he added.
No tax for cooking gas
A dispatch from State House on Thursday indicated Ruto’s administration intended to ask Parliament to exempt cooking gas from the prevailing 8 per cent Value Added Tax (VAT), the 3.5 percent Import Declaration Fees (IDF), and the Railway Development Levy (RDL) of 2 percent.
“To reduce the cost of liquefied petroleum gas (LPG) and make it affordable, reduce the use of biomass fuel and destruction of our forests, the Bill proposes to exempt LPG from VAT, RDL and IDF,” the dispatch read.
The proposal to lower the cost of cooking gas comes at a time when the prices of the commodity are at a record high with the 13 kg cylinder retailing at an average of Sh3,300.
President Ruto directed the Ministry of Energy to embark on plans that will subsidize the prices of cooking cylinders and enhance the uptake of LPG in the country within the next three years.
“We will allocate money that will enable us to reduce cooking gas prices, we will do away with taxes and enable our women to cook without thinking about their health,” Ruto pledged while giving a directive in February.
President Ruto noted that the use of LPG is a major step towards clean domestic energy consumption, noting that household LPG use in Kenya is greater than the African average of 3 kg per capita, but falls below global practice of between 10-15 kg per capita.
According to the 2023 State of the Petroleum Industry report, LPG consumption in the country has been on an upward trend from 93,600 metric tonnes in 2012 to 373,865 metric tonnes in 2021.
It, however, noted that consumption has fallen as a result of the reintroduction of the 16 percent and eight percent VAT in 2021 and 2022 respectively.
