After investing billions in failed National Oil Corporation (NOC) initiatives, the Kenyan government is reviving its plan to distribute subsidized liquefied petroleum gas (LPG) cylinders through a new public-private partnership with oil marketing companies (OMCs).

New LPG Distribution Strategy

The revamped program aims to distribute 9.6 million 6-kg LPG cylinders to low-income households. Under this arrangement, selected OMCs will match each government-supplied unit with one of their own, potentially doubling the program’s impact.

Energy and Petroleum Regulatory Authority (EPRA) Director-General Daniel Kiptoo emphasized that private sector involvement would significantly improve distribution efficiency: “This will allow them to leverage existing supply chains to distribute those cylinders.”

Growing Demand for Clean Energy

The initiative comes as Kenya records a 13.38% increase in LPG demand, with consumption reaching 414,861 tonnes in 2024 compared to 360,593 tonnes the previous year.

Lessons from Past Failures

The shift to private partnerships follows the collapse of the Mwananchi Gas project launched in 2016, which failed due to:

• Operational inefficiencies
• Accountability issues
• Distribution of defective cylinders

A government audit revealed that 149,773 cylinders from the initial project were unaccounted for as of June 2023, with 79,057 units found to be faulty. The program, which received Sh3.1 billion in funding, was suspended in 2019.

Financial Implications

The failed initiative saw significant expenditure including:

• Sh1.12 billion spent on LPG cylinders and accessories
• Additional costs for cylinder inspections
• Purchase of two-burner cookers

The government now hopes that involving licensed OMCs will provide better oversight and operational efficiency, avoiding the pitfalls of the previous rollout.