Cost of cooking gas to go up as new tax is introduced

The cost of cooking gas in Kenya is set increase in price adding more pain to thousands of households.

In the new tax measure that is set to take effect from 1st July, Kenyans will have to spend at least Ksh.350 more to acquire the valuable LPG gas.

The increment is in line with the Finance Act that reinstated Value Added Tax (VAT)  of 16% on liquefied petroleum gas (LPG), but delayed the levy for one year to July due to concerns about the cost of living.

The energy regulator in 2010 started controlling prices for diesel, petrol and kerosene to cushion consumers from high prices, blamed on cartel-like behaviour among dealers.

However, cooking gas was left to the market forces of supply and demand.

The implementation of the tax will see an increase of at least Ksh.350 on the price of cooking gas.

Currently, the 6kg cooking gas is retailing at an average price of 1000 while the 13-kilogramme cooking gas retails at Sh2,250.

The change means that it would now increase to Sh2,610 for the 13kg cooking gas when the new tax measures come into force.

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Confirming the tax, KRA stated that the tax will take effect as from 1st July 2021

“The effective date of the amendment is 1st July 2021. This means that the supply of liquefied petroleum gas will be subject to VAT at standard rate of 16 percent from 1st July, 2021,” the KRA said in an email response to the Business Daily.

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Over the past few weeks, Kenyans have been pouring their dissatisfaction on social media following the ever rising cost of living.

Mid this month, the government had to withhold the price of fuel for the next one month even as the price of oil internationally continues to sky rocket.

The move was following the public outcry over the monthly increment in prices die to too many Levy’s imposed on the commodity.

While cooking gas remains the main source of cooking fuel among the urban dwellers, the new tax will mean urban residents will have to dig more deeper in their pockets to purchase it.

According to the 2019 Census statistics, 53 percent of homes in urban centres rely on Liquid Petroleum Gas (LPG) for cooking compared to 5.6 percent of rural households.

Economic analysts have warned that if the government does not put in place measures to expand economy base of the country, more Kenyans will sink into the poverty trap as the country’s debt continues to rise.

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