Kenya’s petroleum infrastructure is now grappling with unprecedented demand on two fronts, as export volumes along its transit corridor have jumped by 40% over the past two years, while domestic consumption of Liquefied Petroleum Gas has reached record highs. The pipeline network supporting both flows is steadily widening its regional reach, even as pressure mounts.
The export corridor has emerged as the primary driver of growth, with Uganda responsible for roughly 65% of transit volumes moving through the Kenya Pipeline Company network and contributing about 35% of its revenues. In 2024, Ugandan cargo passing through the Port of Mombasa accounted for 65.7% of all transit traffic, with more than 90% of Uganda’s fuel imports routed via Kenyan infrastructure.
Kampala’s decision to acquire a strategic stake in the Kenya Pipeline Company during its March 2026 NSE listing has formalised what was already a deep reliance, effectively turning Uganda from a client into a co-owner of the system that underpins its fuel supply.
Since May 2024, the Uganda National Oil Company has been operating under a Transportation and Storage Agreement with KPC, transporting petroleum imports from Mombasa to depots in western Kenya before onward delivery by road into Uganda. Volumes delivered to Ugandan reserves have doubled between mid-2024 and early 2026.
Data from the Energy and Petroleum Regulatory Authority indicates that export-bound pipeline throughput rose from 1.61 million cubic metres in the second half of 2023 to 2.25 million cubic metres in the same period of 2025, marking a 39.9% increase. Depots in Kisumu, Nakuru, and Konza have all posted consistent gains over this period.
Looking ahead, a long-discussed 350-kilometre pipeline linking Eldoret to Kampala remains on the table, with potential extension to Kigali. First proposed in 1995, the project is still awaiting funding, though it has long been viewed as a strategic move to cement Kenya’s edge in the regional fuel trade, particularly as Uganda explores alternative import routes.
On the domestic front, LPG consumption has climbed sharply, hitting 414,861 metric tonnes in the 2024/25 financial year, nearly triple the volume recorded a decade earlier. The second half of 2025/26 alone saw consumption reach 251,425 metric tonnes, the highest ever recorded. Projections suggest demand could rise to 589,000 tonnes by 2029, reflecting annual growth of 7.3%, as the government pushes to increase LPG usage from 24% to 70% by 2028.
Tax relief measures introduced under the Finance Act 2023 initially lowered prices, with a 13kg cylinder dropping from KSh 3,069 in June 2023 to KSh 2,787 the following month. However, that respite proved fleeting, with prices climbing above previous levels by December, driven by currency depreciation and increased institutional demand, particularly from the government’s school LPG programme.
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The sustained rise in consumption appears to be driven less by price shifts and more by structural changes, including a gradual move away from kerosene, wider distribution networks, and growing institutional uptake.
Meanwhile, the infrastructure underpinning LPG supply is undergoing notable changes. Africa Gas and Oil Ltd, owned by Mombasa businessman Mohamed Jaffer, has dominated over 90% of Kenya’s imported LPG market for more than a decade through its 25,000-tonne terminal. That dominance is now being challenged.
Lake Gas, part of the Lake Group founded by Tanzanian entrepreneur Ally Edha Awadh, commissioned a 10,000-tonne terminal in Vipingo, Kilifi County in 2025, capturing around 2% of import volumes and pushing wholesale prices in Mombasa down from KSh 100 per kilogram in January 2025 to KSh 83 by October. The company is already planning a second, larger facility at the same site.
Further competition is on the horizon. Taifa Gas, owned by Tanzanian billionaire Rostam Aziz, secured final approval in November 2025 to build a 30,000-tonne terminal at the Dongo Kundu Special Economic Zone in Likoni, a project valued at $130.5 million and already under construction.
In parallel, the Kenya Pipeline Company has partnered with Nigeria’s Asharami Energy to develop another 30,000-tonne terminal at Changamwe. Once these projects come online, Kenya’s LPG import capacity is expected to more than triple from its current 37,335 tonnes, intensifying competition and placing downward pressure on handling costs that have long gone largely unchallenged.
