The Energy and Petroleum Regulatory Authority (EPRA) has declined an application by Taifa Gas to set up a gas plant and storage facilities at the Mombasa Port. Taifa Gas is owned by Tanzania tycoon Rostam Aziz, who was ranked as the first dollar billionaire in Tanzania by Forbes in 2013.
This development is expected to threaten a trade spat between Kenya and Tanzania, as Taifa Gas seeks to enter the Kenyan market. The company’s entry to the Kenyan was also part of the Trade Agreement signed between President Uhuru Kenyatta of Kenya and President Samia Suluhu of Tanzania in 2021.
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Currently, the Kenyan cooking gas market remains under the tight grip of Mombasa-based Kenyan businessman Mohamed Jaffer. His firm, Africa Gas and Oil Ltd (AGOL), operates a multi-billion shilling facility. The facility has a capacity of 25,000 tonnes of LPG following a recent upgrade and expansion. The plant was built to allow for bulk imports of cooking gas to lower costs and reduce shortages.
The entry of Taifa Gas was expected to cut the cost of handling and transporting cooking gas from the port of Mombasa to the mainland. This would consequently reduce the selling price to the consumers.
Rostam Aziz has invested in building political networks to complement his businesses. These networks have enabled him to serve as MP and Treasurer of the current ruling party in Tanzania, Chama Cha Mapinduzi (CCM).
Taifa Gas entry into the market is set to trigger an intensive fight for customers against other established gas dealers including Vivo, Rubis and Total. The companies are looking to have a share of the 2.87 million households currently using liquefied petroleum gas (LPG) for cooking purposes.
More private companies have been seeking to benefit from this growing market in absence of investments by the government. This is seemingly the motivation behind Mr. Aziz’s pursuit of entry into the Kenyan market. He has been vocal about the hurdles placed on his bit to enter the market, though he has insisted that he stands firm on his quest.
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