Energy and Petroleum Regulatory Authority (Epra) director-general Daniel Kiptoo told the Business Daily that the State has approved Lake Oil to start constructing its terminal at Kwale while the other seven are at various stages of evaluation.
Kenya currently imports Liquefied Petroleum Gas (LPG) through a privately-owned facility at the Port of Mombasa and the Port of Dar-es-Salaam, locking out competition that is key to lowering the cost of cooking gas.
The absence of competition, the 16 percent Value Added Tax (VAT) and a lack of common-user government-owned facility at the Port of Mombasa have been blamed for the high prices.
Kenya is reviewing applications of companies seeking to build eight privately-owned import terminals for cooking gas in another attempt to lower prices in the absence of government price controls on the commodity.
Energy and Petroleum Regulatory Authority (Epra) director-general Daniel Kiptoo told the Business Daily that the State has approved Lake Oil to start constructing its terminal at Kwale while the other seven are at various stages of evaluation.
Kenya currently imports Liquefied Petroleum Gas (LPG) through a privately-owned facility at the Port of Mombasa and the Port of Dar-es-Salaam, locking out competition that is key to lowering the cost of cooking gas.
The absence of competition, the 16 percent Value Added Tax (VAT) and a lack of common-user government-owned facility at the Port of Mombasa have been blamed for the high prices.
“We have eight privately-owned import terminals for LPG that are at various stages of approval. Some are already doing their Environmental Impact Assessment and two weeks ago we approved Lake Oil to do their plant in Kwale,” Mr Kiptoo said on Thursday.
“These terminals will offer different routes of importing cooking gas and have the desired effect of bringing competition that is key to the lowering the price of cooking gas,” Mr Kiptoo added.
One company is currently handling over 90 percent of Kenya’s LPG shipments while the other chunk comes in through the Tanga plant in Mtwara, with the products trucked via Namanga and Holili border posts.
Gas prices have jumped 48 percent to an eight-year high of Sh2,978 for a 13-kilogramme cylinder as the exclusive club of suppliers and distributors used the introduction of new taxes to hike prices.
The 13-kg gas from Total Energies is retailing at Sh2,995, Rubis K-gas at Sh2,950 and Shell/Vivo’s Afrigas Sh2,990.
LPG firms from Tanzania export about 40 percent of their annual volumes to Kenya highlighting the impact of the lack of many players to ship the product locally.
Prices of LPG in Mombasa are much higher than in Dar es Salaam and Tanga due to more efficient offloading and storage infrastructure.
Cooking gas prices are not controlled unlike petrol, diesel and kerosene with the government stating price controls on LPG will deter investors from coming into the sector.
The government has been promising to control for over a decade after the handling and storage facility under construction in Mombasa is complete.
The terminals will offer the government another avenue to lower prices of cooking gas as it awaits completion of the Kipevu Oil Terminal that will have a common-user berth for handling cooking gas.
Kenya will build a common-user facility for handling cooking gas once the Kipevu Oil Terminal is completed.
The berth that will take 36 months to construct will allow the State to start an open tender system (OTS) for gas imports.
