This archive report was first published on 4 October 2021.
Kenya is set to experience a significant shift in the cooking gas market with the introduction of price controls after the completion of the Kipevu Oil Terminal.
According to Edward Kinyua, Petroleum and Gas Director at the Energy and Petroleum Regulatory Authority (Epra), the industry regulator will set tariffs for handling gas at the berth once the facility is completed in December.
The terminal, which started construction in 2019, will have the capacity to handle four vessels of up to 100,000 metric tonnes and an LPG line, supplementing the two aging facilities in Shimanzi and the old Kipevu terminal.
Under the open tender system (OTS), the ministry will award one oil marketer the right to import gas in bulk every month on behalf of the entire industry, enjoying huge discounts, like is the case with diesel, petrol, and kerosene.
Currently, only one company handles over 90 percent of the LPG shipments at the Port, due to the lack of a common-user State facility at Kipevu.
Mr. Kinyua told Parliament that the regulation of LPG prices needs common-user facilities under the government, and the upcoming facility at the Port will facilitate this.
Price controls for LPG will be similar to the one that currently applies to petrol, diesel, and kerosene, ensuring affordability and boosting consumption.
As of July, LPG prices hit a six-year high after the Treasury reintroduced a 16 percent value-added tax (VAT) on the commodity.
With 23.9 percent of households using LPG as their primary cooking fuel, the government's move is expected to have a significant impact on the market.
