Kenya’s Bold Strategy to Transform the LPG Industry

With significant regulatory changes that aim to half prices and provide cooking gas to homes via a network of pipes, Kenya wants to revolutionize the consumption of liquefied petroleum gas (LPG).

The initiative will make use of a system of pipes called a reticulated gas system in an effort to change Kenya’s energy environment and promote affordability.

According to S&P Global, these modifications along with the abolition of taxes would cause a sharp increase in LPG usage starting in 2019. This will assist draw investments into the sector.

According to a memo from the Cabinet, President William Ruto’s administration is now well-positioned to make accessible, clean energy a pillar of national advancement.

“As part of our LPG growth policy, a framework requiring all housing developments to have provisions for LPG reticulation structure shall be implemented,” the cabinet said in a memo.

The rippling effects of these revolutionary policies are anticipated to be seen not only in the energy sector but also in the broader context of economic growth and environmental sustainability as they take shape.

“Kenyans are paying twice as much as they should for LPG,” said Energy CS Davis Chirchir.

Currently, cooking gas in Kenya is offered in cylinders weighing somewhere between 3 and 50 kg. In Egypt and South Africa, piping is widely used.

As import and distribution infrastructure has improved, LPG consumption has increased significantly in Kenya in recent years, but market penetration is still quite low, according to S&P Global.

“Beyond 2030, as GDP grows and household income improves, we expect per capita LPG consumption growth to accelerate, reaching 8-9 kg per person by 2050,” says S&P.