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Thursday, August 17, 2017

Local LPG use down 38 percent after Tanzania import ban

CS  for Energy and Petroleum Charles Keter addressing the press at the Kindaruma Dam on January 6,2017.Photo Victor Imboto
CS for Energy and Petroleum Charles Keter addressing the press at the Kindaruma Dam on January 6,2017.Photo Victor Imboto

Consumption of Liquefied Petroleum Gas for the six months to June dropped 38.91 per cent, latest data by the Kenya National Bureau of Statistics has shown.

Data shows LPG consumption for the first half of the year declined by 36,050 metric tonnes to 56,590 tonnes from 92,640 tonnes during the same period last year which comes on the backdrop of strained bilateral trade ties between Kenya and Tanzania.

In April, Energy CS Charles Keter designated Mombasa as the only point of entry for LPG, a move aimed at locking out traders from importing cooking gas through Tanzania.

The move, he said, was intended to curb cheaper LPG from Zambia which was reportedly being imported to the country through Tanzania, with most of it ending in illegal refueling plants.

KNBS data shows that since the ban, cooking gas uptake has been recorded at 5,740, 6,550 and 5,190 in April, May and June respectively.

The data shows that cooking gas prices hit the Sh2,000 mark in April this year, highest prices since September 2016. Prices are still averaging slightly above the Sh2,000 mark.

The government’s April ban on LPG coming through the Namanga border renewed the long-running trade feud between the Kenya and Tanzania.

More than a fortnight ago, Kenyan Foreign Affairs cabinet secretary Amina Mohamed and her Tanzanian counterpart Augustine Mahinga announced that the two states had agreed to end the restrictions after ironing out long-standing trade differences.

Kenya lifted restrictions imposed on Tanzanian wheat flour and liquefied petroleum gas while Tanzania removed its blockade of Kenyan milk and milk products and cigarettes.

Efforts to resolve the trade spat have however been unsuccessful as Tanzania maintained some of the restrictions that existed before the truce while Kenya’s Energy secretary Charles Keter said the ban on Tanzania gas imports would remain until the two countries reached an agreement.

Kenya and Tanzania moved to redeem their trade ties following talks between the two country’s top officials.

The teams observed that the strained relations had cost the two EAC countries millions of shillings in foreign exchange earnings.

The talks were spearheaded by Trade PS Chris Kiptoo and his Tanzanian counterpart Adolf Mkenda at the Namanga border.

Kenya and Tanzania’s relationship for the past few months was argued to be defeating the bid for a robust East Africa Community through banning of specific commodities by both parties.

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