Kenyans will, from July 1, be required to pay at least Sh300 more to refill cooking gas following the introduction of a 14 percent value-added tax on liquefied petroleum gas(LPG).
This is according to the Finance Bill 2020 that has now removed LPG from tax-exempt goods with the new value-added tax(VAT) charge in what is meant to push it out of the reach of the most households grappling with depressed incomes.
Currently, to refill the 13Kg cooking gas, one is required to pay between 2, 100, and 2, 200 retail prices, meaning the price will now increase to between Sh2, 400, and Sh2, 500 starting from next month when the new tax rule will take effect.
According to Treasury CS Ukur Yattani, the Finance Bill will become law by the end of June after Parliament changes the Act requiring earlier approval of the Finance Bill to avoid delays that have hurt revenue collection targets in the past.
Gas consumers have since June 2016 been enjoying low coking gas prices since the Treasury removed the Tax on LPG to reduce costs and boost uptake among the poor Kenyans who rely on kerosene and charcoal as fuel for cooking.
This comes as a disappointment to gas consumers as the prices were expected to decline in line with the cost of crude oil.
However, as Kenyans stay at home due to the Covid-19 containment measures to curb the spread of Covid-19, the demand for gas consumption is expected to go high and hence the increase in the price of refilling.
The rise in the price of cooking gas is going to pile pressure on families that are already struggling to foot the daily bills as many have had pay cuts if not losing their jobs in the wake of the Covid-19 pandemic.
Worse still, since the LPG prices are not controlled, the new tax on fuels fears that dealers will exploit the market forces to their advantage.