Why cooking gas could get slightly cheaper by mid 2026

Kenyans may soon feel relief at the kitchen table as a major energy investment at the Coast nears completion, raising hopes of eased supply bottlenecks and slightly lower cooking gas prices.

By June, households and businesses could start paying marginally less for liquefied petroleum gas (LPG) following the expected completion of the flagship Taifa Gas Project at the Dongo Kundu Special Economic Zone (SEZ) in Mombasa. 

The multibillion-shilling facility, now 80 per cent complete, is designed to significantly expand Kenya’s LPG import, storage and distribution capacity, one of the structural weaknesses that has historically pushed up gas prices.

The Taifa Gas terminal is expected to be completed by March 2026, with commercial operations likely to begin shortly thereafter, following commissioning and regulatory approvals. 

Once the facility becomes operational, improved supply reliability and heightened competition could begin reflecting in retail prices within weeks, underpinning expectations of modest price reductions by May.

A standard 13kg cylinder currently fluctuates between Sh2,500-Sh3,000, depending on the brand, while the 6kg cylinder goes for around Sh900‑Sh1,100.

Kenya’s LPG market has for years been constrained by limited storage capacity, forcing suppliers to rely on frequent, smaller imports.

This model has exposed the market to higher logistical costs and price volatility, particularly during periods of elevated global prices or supply disruptions.

The Taifa Gas project is intended to change that equation. 

Once operational, the terminal will enable bulk imports of LPG, lowering per-unit costs and stabilising supply. 

With more gas available in the market, marketers will be better positioned to price competitively, a development expected to benefit millions of households that rely on gas as their primary cooking fuel.

Energy experts argue that even small price reductions could have a meaningful impact on household budgets, particularly in urban areas where LPG usage is highest. 

For commercial users, such as hotels, restaurants and food processors, the savings could be more pronounced, potentially lowering operating costs and supporting business expansion.

The Sh16 billion Taifa Gas facility was launched on February 24, 2023, by President William Ruto, marking one of the largest private-sector investments in Kenya’s clean energy infrastructure.

Speaking during the launch, Ruto described the project as a historic milestone “on our journey to achieve self-sufficiency in clean, green energy.”

He said the facility would play a critical role in transforming Kenya’s energy landscape while driving inclusive economic growth.

“This is a critical component of our commitment to deliver rapid socioeconomic transformation through clean, green growth,” the President said.

He noted that expanding LPG infrastructure would help reduce pressure on forests, improve public health outcomes and lower energy costs for households and businesses, aligning with the government’s broader climate and development agenda.

Construction of the terminal, however, stalled for several months following compensation and resettlement disputes involving affected residents around the Dongo Kundu site. 

The delays slowed progress until last October, when the issues were resolved, allowing work to resume and the project to regain momentum.

The development involves the construction of a 30,000-tonne LPG import and storage terminal, with capacity designed to be expandable to about 45,000 tonnes to meet rising demand.

The facility includes large storage tanks, modern loading and unloading infrastructure, advanced safety systems and related support facilities, positioning it as one of the most significant LPG installations in the region.

During a recent inspection tour of the Dongo Kundu SEZ, Trade and Industry Cabinet Secretary Lee Kinyanjui praised the pace of development, describing it as a signal of Kenya’s accelerating industrial transformation.

“The accelerated investment at the Dongo Kundu Special Economic Zone is impressive and clear evidence of the country’s journey toward Singapore-level industrial growth,” CS Kinyanjui said.

He said the government views the Taifa Gas project as a strategic intervention not only to make cooking gas more affordable but also to lower the cost of doing business across multiple sectors of the economy.

“The quest for affordable gas is firmly on course, with the Taifa Gas flagship project now 80 percent complete. Once operational, more households and businesses will access cheaper gas, significantly lowering the cost of doing business, particularly for high-consumption users such as hotels,” he said.

Why prices could ease

Market players attribute the anticipated price relief to three main factors: expanded storage capacity, bulk import efficiencies and increased competition.

Currently, limited storage forces suppliers to import LPG more frequently, often at higher spot-market prices. 

The new terminal will allow importers to buy LPG in bulk when global prices are favourable and store it safely for phased release into the market.

Economies of scale are also expected to reduce logistical costs, from shipping and port handling to inland distribution. 

These savings are likely to be passed on, at least partially, to consumers. 

Additionally, the entry of a large, well-capitalised player is expected to intensify competition, placing downward pressure on prices.

Infrastructure backing the vision

The Taifa Gas terminal is part of a broader infrastructure build-out at Dongo Kundu that includes the Dongo Kundu Port berth project, which will directly serve the SEZ.

The berth project is progressing steadily and is expected to improve logistics efficiency for bulk imports, including LPG. 

The berth currently employs 360 workers, highlighting its immediate economic impact even before completion.

Once operational, the facility is expected to cut vessel turnaround times and reduce congestion at existing port facilities, further lowering import costs and improving supply chain efficiency.

CS Kinyanjui noted that efficient logistics infrastructure is critical if Kenya is to compete as a regional industrial hub, with the integration of port, energy and manufacturing facilities forming the backbone of the SEZ model.

Industrial ripple effects

Beyond cheaper cooking gas, the Dongo Kundu SEZ is already attracting manufacturers keen to take advantage of improved infrastructure and investment incentives.

Glass manufacturing firm MilliGlass has begun setting up operations at the zone, marking one of the earliest industrial projects to take shape.

The investment is expected to create jobs and boost export earnings, adding momentum to the SEZ’s ambition of becoming a key industrial node.

Such manufacturers will benefit from affordable and reliable energy supplies once the Taifa Gas terminal becomes operational, reinforcing the link between energy infrastructure and industrial competitiveness.

The government is banking on private sector investments such as the Taifa Gas terminal to help bring down cooking gas prices as it seeks to sharply increase LPG penetration across the country, from the current 24 per cent to 70 per cent by 2028.

To support this transition, the National Treasury in 2023 removed key taxes on cooking gas, exempting LPG from Value Added Tax (VAT), the 3.5 per cent Import Declaration Fee (IDF) and the two per cent Railway Development Levy (RDL). 

The measures were aimed at lowering pump prices and making gas more affordable for low- and middle-income households.

The policy shift also forms part of a broader effort to reduce Kenya’s heavy reliance on charcoal and firewood, fuels that remain dominant in many homes but have been linked to high rates of respiratory diseases, particularly among women and children.

In 2016, the Jubilee administration launched the Mwananchi Gas Project, a flagship initiative aimed at making cooking gas more affordable for low‑income households. 

The programme sought to distribute subsidised 6kg LPG cylinders complete with burners and accessories, with the goal of reducing reliance on charcoal and kerosene while expanding access to clean energy.

The government envisioned reaching up to 1.2 million households, promoting both health and environmental benefits, and boosting LPG penetration across the country. 

However, despite the ambitious plan, the project faced significant challenges that ultimately hindered its success.