LPG piles pres­sure on kerosene, data shows

LPG is seen as a more clean en­ergy source,much bet­ter than Kerosene which is blamed for in­creased health prob­lems

The Star (Kenya) - - News Business - CYNTHIA ILAKO AND RICHARD MUNGAI @TheS­tarKenya

The Kerosene mar­ket is fac­ing a huge threat from Liqui­fied Petroleum Gas which is now seen as a bet­ter al­ter­na­tive by Kenyan house­holds due to in­creased af­ford­abil­ity.

The trend in de­mand for both fu­els has been marked with sharp dif­fer­ences in the past two years, de­spite a sig­nif­i­cant drop in re­tail prices which was trig­gered by the crash in the global oil mar­kets in mid 2014.

Kenya Na­tional Bureau of Statis­tics data show, kerosene prices dropped by 50 per cent from an av­er­age of Sh84.45 per litre in Au­gust 2014 to Sh43.15 in Au­gust 2015.

The con­sump­tion of kerosene has how­ever re­mained slug­gish at 379.62 met­ric tonnes an­nu­ally com­pared to an an­nual av­er­age of 323.02MT that was recorded be­fore the oil mar­kets crashed. On the other hand, the data shows the price of the bench­mark 13-kilo­gramme cook­ing gas cylin­der fell from Sh3,109.67 in Au­gust 2014 to Sh2,078.67 in the same pe­riod in 2016.

This caused a spike in de­mand for LPG from an av­er­age of 40MT an­nu­ally to 104MT.

Dur­ing the two-year pe­riod, crude re­mained cheap in the in­ter­na­tional mar­kets amid over­sup­ply by the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries.

The global bench­mark Brent crude recorded a sig­nif­i­cant drop in prices from an av­er­age of $103.59 (Sh10,521.64), per bar­rel in 2014 to $44.70 (Sh4,540.18), in 2016.

The En­ergy Reg­u­la­tory Com­mis­sion re­views the prices of all petroleum fu­els sold in the coun­try ev­ery month, ex­cept LPG.

LPG is seen as more clean en­ergy source,much bet­ter than kerosene which is blamed for in­creased health prob­lems among its users. Ac­cord­ing to ERC, the stan­dard­i­s­a­tion of the cook­ing gas cylin­der valve has sig­nif­i­cantly in­creased con­fi­dence in the use of LPG gas. Its up­take is ex­pected to in­crease fur­ther af­ter it was zero rated un­der the Fi­nance Act 2016, mak­ing it even more af­ford­able.

/ JACK OWUOR

A cus­tomer buys Kerosene at a re­tail out­let in Kib­era, Nairobi. Kerosene mar­ket is fac­ing a huge threat from liqui­fied petroleum gas which is now seen as a bet­ter al­ter­na­tive by Kenyan house­holds due to in­creased af­ford­abil­ity

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