Kenya Rejects Saudi LPG Deal: Cooking Gas Crisis Deepens as Affordable Supply Remains Elusive

In a move that has further complicated Kenya's struggle for affordable cooking gas, the government has officially rejected a Ksh 2.5 billion deal with Saudi Aramco. The agreement, which had promised to significantly lower gas prices, faltered due to terms that would have granted the Saudi company exclusive supply rights, a condition the Kenyan government deemed untenable.

Appearing before the Senate Energy Committee, Energy Cabinet Secretary Opiyo Wandayi confirmed the collapse of the negotiations, stating that Kenya could not accept the stipulations tied to the deal, including the exclusive supply clause. "The Memorandum of Understanding was never executed as expected, because we could not reach an agreement on the terms," Wandayi explained, stressing that the proposed arrangement would have granted Saudi Aramco sole rights to supply Liquefied Petroleum Gas (LPG) to Kenya—an outcome the government could not accept.

The agreement, part of a broader Saudi-backed Oil Sustainability Programme, was intended to bolster Kenya’s LPG distribution network by providing financing in tranches. The funds would have supported the distribution of approximately 8.4 million cooking gas cylinders and expanded Kenya's import and storage infrastructure, including a floating storage facility offshore at the Port of Mombasa. This offshore facility was set to handle up to 30,000 tonnes of LPG and serve as a temporary storage and bottling solution while a permanent onshore terminal was developed.

However, with the deal now scrapped, Kenya’s hopes of securing affordable cooking gas for its citizens have been dashed, at least for the time being. Despite this setback, the Kenya Kwanza administration had promised to lower cooking gas prices and ensure supply for ordinary Kenyans. The government’s failure to finalize this deal means those promises will have to wait longer, leaving many Kenyans struggling with the high cost of cooking gas.

In response to the collapse of the Saudi Aramco partnership, the Energy Ministry is pivoting towards greater private sector involvement in the development of Kenya’s LPG infrastructure. Requests for proposals have already been issued, and four local firms have been identified to support the manufacturing of gas cylinders. The Ministry, Wandayi assured, will continue working closely with private entities to drive the development of LPG storage and importation facilities.

Despite the challenges, Wandayi provided a measure of reassurance, revealing that Kenya’s petroleum stocks remain stable. "We have enough supplies to last until April, and we have agreements in place with Gulf international energy companies to ensure continued stock levels," he said.

Yet, with the deal’s collapse, the promise of affordable cooking gas for millions of Kenyans remains uncertain, as the government repositions its strategy to address the growing demand for accessible and affordable energy in the country.