Cooking gas price to drop by KSh430
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Relief to Kenyans as cooking gas price set to drop by KSh430 per 13-kilo cylinder according to a communique from State House
Relief to Kenyans as cooking gas price set to drop by KSh430 per 13-kilo cylinder according to a communique from State House.
If Parliament approves a government proposal to eliminate three tariffs on cooking gas, the price for the 13-kilogram container will drop by about Sh430.
According to a brief from State House on Thursday, the William Ruto administration would seek MPs to exclude cooking gas from Value Added Tax (VAT), Import Declaration Fees, and the two percent Railway Development Levy through the Finance Bill 2023.
As part of the transition to clean cooking by 2030, President Ruto has set an ambitious proposal to remove taxes on cooking gas tax-free in an effort to make it cheaper, especially among low-income houses.
The Finance Bill 2023 will be tabled in Parliament before June.
Cooking gas prices are currently at record highs with the 13-kilogram going for an average of Sh3,300, mainly attributed to the VAT and global high prices of crude.
“To reduce the cost of liquefied petroleum gas (LPG) and make it affordable, reduce the use of biomass fuel and destroy our forests, the Bill proposes to exempt LPG from VAT,” reads the State House brief.
“It further proposes to exempt LPG from Railway Development Levy (RDL) and Import Declaration Fees (IDF).”
The proposal will knock off Sh256 in VAT, Sh112 in IDF, and Sh64 for RDL for the 13-kilogramme based on the current prices.
Parliament reinstated a 16 percent VAT on cooking gas in July 2021, ending a five-year period when the tax had been frozen as the government sought to lower prices and boost uptake.
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Return of the tax saw gas price jump by up to Sh350 as dealers passed the levy to consumers amid soaring prices globally.
The tax was halved last year but prices have not dropped as anticipated.
The proposal, if adopted, will retain the Petroleum Development Levy of Sh0.40 per kilogramme as the only tax on cooking gas.
Official data shows that 24 percent of Kenyan homes use cooking gas, making it the second most popular after firewood.
It however remains unclear if the proposals will also apply to cylinders of cooking gas amid promises by Mr Ruto to lower the prices by at least Sh300.
Cylinders of cooking gas attract a VAT of eight percent, IDF, and RDL at the rate of 3.5 percent and two percent respectively on the Cost, Insurance, and Freight per container.
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