Kenya To Stand To Benefit From Tanzania Gas Pipeline

The Kenyan government has announced plans to speed up construction of the proposed gas pipeline from Tanzania in efforts to cut prices of cooking gas.

President Ruto on Monday said the 600-kilometre pipeline that Kenya will use to import gas from the Mtwara plant in Tanzania is a priority item, a pronouncement that looks set to end a delay of over one year.

The pipeline whose cost is estimated at Ksh132 billion ($1.1 billion) is part of a Memorandum of Understanding (MOU) on Cooperation in Natural Gas Transportation that former President Kenyatta signed with Tanzanian president, Samia Suluhu in May last year.

“We will expedite the gas pipeline from Dar es Salaam to Mombasa and eventually to Nairobi so that we can use the resources that we have in our to lower energy tariffs both for commercial and domestic use in Kenya,” Mr. Ruto said on Monday in a joint briefing with President Suluhu.

“We will ensure that what the Government of Kenya is required to do will be done in a timely, efficient and effective manner so that in the shortest time possible we can access the gas resources that you have in your country.”

The project to be funded through Public Private Partnership (PPP) will, upon completion, allow Kenya to tap the vast natural gas deposits of Tanzania and lower the cost of cooking gas and electricity prices.

The 13-kilogram cooking gas has shot up to Ksh3,400 while the six-kilograms is going for Ksh1,500 at the back of global rally in crude prices and the re-introduction of the six percent Value Added Tax (VAT) on the commodity.

Kenya re-introduced 16 percent VAT on cooking gas in July last year and coupled with the global jump in cost of crude, led to a surge in prices of the commodity.

The tax was halved this year after a public uproar, but oil marketers have failed to pass on the tax reduction to consumers. Unlike diesel, super and kerosene, prices of cooking gas are not controlled by the state leaving consumers at the mercy of oil dealers.

Importation of gas from Tanzania will offer Kenya an alternative to lowering the cost of cooking gas.