A motorcyclist commonly referred to as ‘Boda Boda’ in Kenya ferries sacks of charcoal along the Nakuru -Nairobi highway, Nakuru, Kenya, Sept. 16, 2015. (Xinhua/Simbi Kusimba)
Xinhua — Extremely low cooking gas prices have disrupted business for charcoal dealers in Kenya, threatening to push them out of the market.
Initially enjoying a boom due to high Liquefied Petroleum Gas (cooking gas) prices, tables have been turned on charcoal traders as consumers stick to the clean energy, thanks to low prices. Cooking gas is currently being sold at an average of 15 U.S. dollars by independent dealers in the capital Nairobi, with some pushing down the price further to 13 dollars.
About a year ago, the commodity went for at least 20 dollars, with low income earners keeping off. Consumption has now swelled by 250 percent than a year ago, boosted by low global oil prices and removal of 16 percent value added tax on the commodity. The East African nation’s citizens are consuming over 17,000 Metric Tonnes (MT) of cooking gas a month, up from 5,000 MT tonnes a year earlier, according to the Ministry of Energy.
Many of those who have embraced the fuel are low income earners, who initially relied on kerosene and charcoal for cooking. The two were loved because they could be bought in small quantities, starting from 0.05 dollars for kerosene, whose prices have also dropped, and charcoal at 0.20 dollars.”I wish I would rewind back the clock and push the price of cooking gas up because if things continue the way they are, we will be pushed out of business,” Simon Oyora, a charcoal trader in Kayole, on the east of Nairobi, said Monday.
A boy transports sacks of charcoal for sale in Garissa, northeast Kenya, Oct. 20, 2014. Xinhua/Steve Ingati
Oyora sells charcoal in small plastic bags that go for 0.40 dollars to maximize profit. “Initially, I would sell at least 20 of the bags a day but now with low cooking gas prices, I am lucky to hit five.” His saving grace is that that is not his only business as he runs it alongside a household goods shop.”I bought three bags of charcoal about a month ago and to date I have not even sold more than half. That is how bad business is,” he said, capturing the agony of tens of other traders.
A 90kg sack of charcoal is retailing at 15 dollars, which is the same as the current price of a 13kg cylinder of cooking gas. On the other hand, a 6kg cylinder is being sold at between 7 dollars and 8.5 dollars across the capital.
While a 90kg sack of charcoal can serve a family of four for less than a month if they use it exclusively, they can spend at least a month and half with the 13kg cooking gas cylinder, making the latter efficient.
The savings can be higher if one uses cooking gas and kerosene concurrently. That is besides the fact that cooking gas is clean, faster and one does not go through inconveniences like washing hands or fanning the cooker as it happens with charcoal. “It does not make economic sense to use charcoal right now, many families have turned to cooking gas or kerosene, which are more efficient and easy to use,” said stone-mason Moses Aseka, who owns a 6kg cylinder that lasts him close to a month.
Analysts noted that the low cooking gas prices hand Kenya a chance to embrace clean and efficient fuel.”If the prices persists, let us say for the next two years, the amount of forest cover we would have saved would be significant because some charcoal dealers destroy the ecosystem. The low prices cooking gas prices are the best way to fight deforestation,” said Henry Wandera, an economics lecturer in Nairobi.
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