LPG competition is good for consumersFriday February 24 2023
The energy regulator has finally issued a licence to Taifa Gas, the largest LPG supply company in Tanzania, opening up the sector that had remained under the grip of a few companies to competition.
The firm owned by Tanzanian billionaire Rostam Aziz plans to build a 30,000-tonne Kenya facility at the Special Economic Zone in Dongo Kundu, near the port of Mombasa.
It was earlier estimated to cost $130 million (Sh16.25 billion).
Besides introducing competition, which will result in more choices for the consumer and drops in prices, the decision will defuse the diplomatic tension between Kenyan and Tanzania that was building after the tycoon lamented that Kenya had gone quiet over his enquiries to build the LPG handling facility in the country.
The allegation did not also sit well with a region that is pursuing a common market anchored on the free movement of goods and services.
The entry of Taifa Gas into Kenya is part of a trade deal agreed upon by Kenya’s former President Uhuru Kenyatta and Tanzania’s Samia Suluhu in 2021.
The decision, though long overdue, is welcome coming at a time when gas prices have hit an all-time high, with the latest upward reviews in prices happening this month.
It is in the interest of Kenya to be a good example for the region when it comes to encouraging foreign investors, to set up on its shores.
Licensing processes should also be transparent and should not be politicised since this can end up hurting the fortunes of businesses if they are associated with particular administrations.