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 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.
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