TotalEnergies Marketing Kenya has turned to a Sh700 cooking gas refill package to grow sales among low-income households in the wake of escalating prices of the commodity.
The firm says thousands of low-income homes are currently using the three-kilogramme package dubbed Baby Meko, which primarily targets financially vulnerable households.
The three-kilogramme Baby Meko was launched towards the end of last year as TotalEnergies raced to tap into a large market left open following the abrupt exit of clean energy firm Koko Networks and escalating prices of liquefied petroleum gas (LPG).
Koko exited Kenya in the first week of January this year after months of cash constraints, having failed to secure government approval to sell carbon credits, which it relied on to move towards profitability.
Its collapse left more than one million homes, mostly low-income households, facing the possibility of reverting to charcoal and kerosene due to escalating prices of six-kilogramme and 13kg LPG refills.
Prices of LPG refills last month shot up by more than Sh230 for the six-kilogramme container and Sh390 for the 13kg one, further pushing the commodity out of reach for many households.
“To address one of the most persistent challenges – affordability among low-income households – we introduced the Baby Meko 3kg cylinder, retailing at Sh2,200 (cylinder and gas) outright and Sh700 per refill (gas only),” TotalEnergies says in its latest annual report.
“This innovation has allowed us to reach thousands of families who previously lacked access to clean cooking solutions due to cost barriers.”
Price shock
Prices of cooking gas refills rose sharply at the start of last month following the Middle East conflict, which triggered a spike in the prices of butane and propane, two key LPG components.
The six-kilogramme cooking gas refill is retailing at Sh1,620 at TotalEnergies, up from Sh1,390 in March. The same container is selling at Sh1,570 at Rubis Energy Kenya, also up from Sh1,390.
The surge in local prices reflects global trends, where the price of propane jumped by $205 (Sh26,477.80) per tonne to $750 (Sh96,870) from the start of last month, while butane prices climbed by $260 (Sh33,581.60) per tonne to $800 (Sh103,328).
Baby Meko is currently among the cheapest and smallest LPG packages in the retail market, offering low-income households a chance to continue using gas at a time when prices have surged following the US-Israel war with Iran.
The product is also filling a gap left by the collapse of Koko Networks, which had sold subsidised clean biofuel to an estimated 1.5 million customers across Kenya, most of them from low-income households.
The British clean energy startup sold a litre of fuel at a subsidised price of Sh100 against a market price of Sh200. The cost of the stoves was also subsidised to Sh1,500 from the market price of Sh15,000.
Koko relied on the sale of carbon credits and used the proceeds as a non-government subsidy to lower the prices of biofuel and stoves, making them affordable for low-income households.
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