Kenyan households are expected to dig deeper into the pockets come July this year to purchase cooking gas.
This follows disclosure by Kenya Revenue Authority(KRA) that it will impose a 16% Value Added Tax(VAT) on Liquified Petroleum Gas(LPG) beginning 1st July 2021. The tax charge is expected to push up the price of cooking gas upwards of KSh 300 in most outlets.
The Finance Act reinstated VAT on LPG but delayed the levy for one year to July 2021 amid concerns over high living costs.
The KRA action on LPG is expected to hurt low-income earnings, most of whom are out of work or struggling with COVID-19 disruptions.
Cooking Gas prices
Currently, the 13-kilogramme LPG retails at KSh2,250, meaning that it would now increase to KSh2,610 when VAT is imposed on the commodity.
Cooking gas prices haven’t changed much over the past year despite the volatility in the global crude oil market. Fuel prices oscillated between a low KSh89.10 a litre in June 2020 to the current KSh122.80.
For the past five years, Kenyans enjoyed low cooking gas prices after the Treasury scrapped the tax on LPG to encourage its uptake among low-income households.
There are concerns that unscrupulous dealers will exploit consumers through undue LPG price hikes.