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Commodities

Kenya, Dar trade spat cuts gas vendor’s market share

Gas vendors in Nyeri. FILE PHOTO | NMG
Gas vendors in Nyeri. FILE PHOTO | NMG 

A leading Tanzanian cooking gas vendor saw its share market in Kenya shrink by 4.7 percentage points in the second quarter of the year as an import ban from its home country into Kenya took a toll.

Latest data from the Petroleum Institute of East Africa (PIEA) shows Lake Gas commanded 17.6 per cent of the Liquified Petroleum Gas (LPG) market in the three months ending June, second to KenolKobil with 18.4 per cent share.

In March, it held the largest share at 23.1 per cent, having jumped from 14.1 per cent in December 2016. The firm had not featured on the list of PIEA’s top gas suppliers as recently as September 2016.

It is owned by Dar tycoon Ally Etha Awadh who recently acquired Kenya’s Hashi Petroleum retail fuel business, although this did not include Hashi’s gas business.

Lake Gas has been selling its branded gas locally, but also supplies independent re-fillers, cutting the retail cost substantially.

Kenya banned gas imports through its border with Tanzania in April saying it wanted to eliminate illegal filling plants that are deemed a safety risk.

Tanzanian border
Before the ban, it was estimated that 2,000 metric tonnes of gas were coming into the country through the Tanzania border per month.

KenolKobil’s #ticker:KENO rise to the top of the gas market has come after the firm grew its share by 4.4 percentage points in the second quarter, while French oil giant Total slipped one place to third at 14.7 per cent.

Vivo gained a percentage point in market share to stand at 11.6 per cent during the second quarter, while Libya Oil’s market share stood at 11.1 per cent compared to 8.9 per cent at the end of March.

The gas market has seen increased competition in recent years as small independent retailers have cornered a larger slice of the market due to a pricing advantage.

In response, the larger, more established marketers have accused the newer players of undercutting them by illegally refilling their cylinders, thus avoiding the cost of procuring the cylinders.

Total commanded 19.7 per cent of the market by the end of March.

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