Kenyan businessmen and traders have ganged up against the government following a spike in the prices of cooking gas.
A report by Business Daily on Monday, July 5, indicated that members of the Energy Dealers Association filed a petition after the state re-introduced 16% tax on the crucial commodity hence sending its price skyrocketing.
The group is seeking to have the court freeze the new changes that took effect on Thursday, July 1, as the state seeks to expand its revenue collection.
The traders argued that with the spike, consumers will reduce their spending on the commodity hence driving their businesses into turbulent times amidst the Covid-19 pandemic.
"The change in consumers' character will have the ripple effect of affecting the small and medium clean cooking gas enterprises as the decrease in demand of their products may make their business models less commercially viable.
"Amidst the Covid-19 pandemic, most sectors have already experienced financial and operational challenges, forcing some of them to close down, limit their production and lay off workers," stated the association.
They further noted that the introduction of the Value Added Tax (VAT) was only destined to worsen the situation.
In the new changes, a regular 13kg cylinder now retails at Ksh 2,650 which is an increase by Ksh400 making it the highest price in six years.
The price was effected after President Uhuru Kenyatta assented to the Finance Act, 2021, but postponed its enforcement due to Covid-19 effects on the economy.
The new tax comes after a global increase in petroleum prices.
The low gas prices were effected in 2016 when Treasury scrapped the tax to encourage individuals from poor households to tap into the market.
Liquified petroleum gas is considered a clean source of energy as opposed to the more often used alternatives of charcoal or kerosene.
