Nearly two months after Tanzanian billionaire Rostam Aziz was granted a license to establish a cooking gas plant and storage facilities at the Mombasa port through his LPG supply company Taifa Gas, 13 additional firms are now vying for licenses to construct berths for handling cooking gas imports in Kenya.
The surge in applications comes as part of the Kenyan government’s ongoing efforts to lower the cost of handling and evacuating cooking gas from ships to the mainland and decrease cooking gas prices in the country, following a trade agreement signed between Kenya and Tanzania in April 2022.
These new applications from both established and new players in the oil and gas industry, including Kenya Pipeline Company (KPC), Eleven Energy, and Fossil Fuels, aim to enhance competition and further reduce cooking gas prices in Kenya.
This increased competition in the oil and gas industry is expected to decrease the market share of AGOL, owned by Mombasa-based tycoon Mohamed Jaffer, which presently handles 90 percent of cooking gas imports in Kenya.
With the coming on-stream of Rostam Aziz’s new 30,000-tonne LPG handling facility in Kenya’s Export Processing Zone in Mombasa, as well as a planned 30,000-tonne KPC berth at the Kenya Petroleum Refineries (KPRL) in Mombasa, AGOL’s control over the market is set to decrease.
This development is likely to lead to reduced handling costs for cooking gas imports and lower prices for consumers, as the country moves towards opening up the sector ahead of the planned price control regime in 2025.
As other companies, including KPC, seek licenses from EPRA, Aziz’s Taifa Gas Plant has broken ground for the construction of a 30,000-tonne cooking gas handling facility in the Dongo Kundu Special Economic Zone.
The plant is expected to be completed by the end of this year and is viewed as the government’s initial move towards leveraging the private sector to reduce cooking gas prices by spurring competition at the import-handling point.
