Kenyans may have to wait longer for affordable cooking gas after the government declined a Ksh2.5 billion deal with Saudi-based energy giant Saudi Aramco, citing restrictive conditions that would have affected the country’s energy market.
Appearing before the Senate Energy Committee, Energy Cabinet Secretary Opiyo Wandayi said negotiations between Kenya and the Saudi firm collapsed after both parties failed to agree on key terms in the proposed Memorandum of Understanding.
According to the CS, one of the main sticking points was a clause that would have granted the company exclusive rights to supply Liquefied Petroleum Gas (LPG) to Kenya. The government rejected the condition, terming it untenable and potentially harmful to competition in the local market.
“The proposed agreement came with serious conditions, including exclusive supply rights, which we could not accept,” Wandayi told the committee.
The deal was part of a Saudi-backed Oil Sustainability Programme that aimed to support the distribution of approximately 8.4 million gas cylinders across the country, while also boosting Kenya’s LPG import and storage capacity. The funding was expected to be released in phases.
With the collapse of the agreement, efforts to lower cooking gas prices—a key promise under the Kenya Kwanza administration—have suffered a setback. Many households had anticipated relief through increased access to affordable LPG, which remains out of reach for a significant number of Kenyans.
The government had also been exploring plans to establish a floating LPG storage and processing facility off the Port of Mombasa. The facility, which was expected to handle up to 30,000 tonnes of LPG, was seen as a temporary solution as the country develops a permanent onshore terminal.
However, the future of the project now remains uncertain following the failed deal.
In response, the Ministry of Energy has shifted focus to private sector participation to drive investment in LPG infrastructure. Wandayi revealed that requests for proposals have already been issued, with four local firms identified to support cylinder manufacturing.
He maintained that the government remains committed to expanding access to clean and affordable cooking energy through alternative partnerships.
Despite concerns over the stalled deal, Wandayi assured that the country has sufficient petroleum stocks to meet current demand, noting that supply agreements with international partners remain in place.
The development underscores the challenges facing Kenya’s push to make cooking gas more accessible, as the search for sustainable and affordable solutions continues.
