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Policy on LPG awaits Kenya Cabinet, Parliament approval

BUSINESS
By Jackson Okoth | June 24th 2015

A draft policy document that aims to shift Kenyan household energy needs from unsustainable options like firewood and charcoal to cleaner modern forms like Liquified Petroleum Gas (LPG), is ready.

The policy also seeks to encourage private sector investment in additional capacity for handling and storage of LPG for an efficient and effective supply chain.

“As the final draft Policy awaits approval by both Cabinet and the National Assembly, the Government through the Ministry of Energy & Petroleum constituted a multi-sectorial sub-committee that has drawn up proposals and strategies to promote utilisation of cleaner household fuels including LPG for implementation,” said Energy and Petroleum Principal Secretary Joseph Njoroge.

He made these remarks while officially opening the Second Africa Liquified Petroleum Gas summit, which ends today at Safari Park Hotel, Nairobi.

Petroleum Institute of East Africa (PIEA), one of the sponsors of this summit dubbed keys to unlocking LPG use in Africa, commended the Government for removing all taxes on LPG appliances manufactured locally as presented in the 2015-16 Budget by Treasury Cabinet Secretary Henry Rotich.

“The move is in line with the Government’s deliberate undertaking to increase consumption of LPG,” said PIEA General Manager Wanjiku Manyara.

Import duty

The Government removed all taxes on Liquified Petroleum Gas appliances manufactured locally in the 2015-16 Budget. This is in line with the Government’s deliberate undertaking to increase consumption of LPG, which has hitherto stagnated.

At a pre-budget consultative meeting held in Arusha on April 11, 2015, the ministers for Finance agreed to remove gas cylinders from the exemption regime. In exchange, the import duty rate for the cylinders was reduced to zero per cent from 25 per cent.

Considering that Kenya is the only manufacturer of gas cylinders in the East African Community region, it negotiated to import gas cylinders at a rate of 25 per cent instead of 0 per cent to protect local manufacturers.

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