The government is partnering with oil marketers for the distribution of liquefied petroleum gas (LPG) cylinders to low-income households after an initial programme through the National Oil Corporation of Kenya (Nock) flopped.
The State now wants to distribute 9.6 million 6kg cylinders to low-income households through licensed oil marketing companies (OMCs) under a scheme that that will see selected dealers match each cylinder supplied by the government with their own cylinder for distribution to homes.
This would see the total number of LPG cylinders supplied to poor households through the programme rise to 19.2 million, with the contracted OMCs reaping huge benefits from the LPG refills.
“The government will invest by capitalising the business by distributing about 9.6 million 6kg cylinders to all the low-income households and this will be distributed through licensed OMCs through a programme of matching where OMCs will invest in a cylinder and government will match by giving another cylinder and this will be capitalising their business,” said Daniel Kiptoo, the director-general of the Energy and Petroleum Regulatory Authority (Epra).
The tapping of OMCs is a new strategy by the government after the initial programme to supply LPG cylinders to low-income households flopped amid high levels of incompetence and lack of accountability in the programme.
Mwananchi Gas, as the programme was called - which would have provided poor households with subsidised LPG cylinders, burners and grills to encourage the use of modern cooking fuels - was launched in 2016 but was riddled with inefficiencies, with an audit finding that 149,773 LPG cylinders could not be accounted for as of June 2023.
The cooking gas subsidy scheme, introduced by the Energy ministry in the 2016/2017 financial year, was aimed at cutting reliance on environmentally unfriendly kerosene and charcoal, which are the main sources of fuel for most rural and urban poor households.
The implementation of the scheme was, however, hindered by some suppliers who provided faulty cylinders. The plan was also adversely affected by distribution challenges at the State-owned National Oil Corporation, which was to drive the programme.
Mr Kiptoo said the government wanted the country’s LPG sector to continue to operate under the leadership of the private sector as the state capitalises on the sector’s operations.
“This will allow them to leverage existing supply chains to distribute those cylinders,” he said.
The government’s plan comes at a time when there has been huge growth in LPG consumption in the country, with a 12.26 percent growth in the second half of 2024, compared to the first half.
Between July and December 2024, Kenyans consumed 219,416 tonnes of LPG, up from 195,445 tonnes between January and June.
In monthly consumption terms, Kenyans consumed 37,485 tonnes in December 2024, which was a four-month high since the 38,268 tonnes used in August.
The full year LPG consumption of 414,861 tonnes was also an increase from the consumption of 360,593 tonnes, Epra data shows.
Epra licensed 974 businesses to provide LPG services in the six months to December 2024, including 465 companies for the retail of LPG cylinders, 161 firms for transport of cylinders, 120 entities for storage and wholesale of cylinders and 113 businesses for bulk transport of LPG cylinders by road.
Epra also granted 51 licences for the storage and filling of LPG cylinders, 50 for bulk import, export and wholesale of LPG, nine for the retail of LPG at autogas dispensing stations and four for bulk storage and filling of LPG.
LPG businesses accounted for 30.6 percent of the 3,182 licences issued by Epra during the six months, during a period when LPG consumption in the country grew by 12.26 percent compared to the first half of 2024, the report notes.
“We have licensed quite a number of companies. LPG is driven by the private sector, the consumption you see today is mainly driven by the private sector. Even from the importation, it’s the private sector that has been doing it,” said John Mutua, the director of economic regulation and strategy at Epra.
During the same period, Epra issued construction permits for 10 autogas dispensing stations, three LPG storage and filling facilities, and one LPG consumer site.
