Kenyans could face higher Liquefied Petroleum Gas (LPG) prices from next month following a sharp increase in the international prices of propane and butane, the two primary gases used in cooking gas production.
The development is likely to increase the financial burden on households that depend on LPG, as higher global prices could translate into more expensive refills in the Kenyan market.
LPG is manufactured by combining propane and butane, with the prices of both commodities largely affected by global supply and demand as well as developments in major producing regions such as Saudi Arabia.
Data from Saudi Aramco, one of the Middle East's major LPG processors and suppliers to Asian markets, showed that butane prices increased by 25.8 per cent in August, rising from Ksh64,620.50 to Ksh81,326.
Propane prices also climbed by 23.2 per cent over the same period, increasing from Ksh51,929.50 per tonne to Ksh63,973.50 per tonne.
The price surge has occurred against the backdrop of renewed conflict involving the United States and Iran, which has disrupted fuel transportation routes in the Middle East, particularly the Strait of Hormuz.
The disruptions have also affected Saudi Arabia's Yanbu port, which is used as an alternative route for fuel shipments whenever movement through the Strait of Hormuz is constrained.
LPG exports from the Yanbu terminal to Asian markets declined from 302,600 tonnes in June to 240,300 tonnes in July before plunging to 71,200 tonnes in August.
Preliminary market figures indicate that liquefied petroleum exports could fall further to approximately 51,700 tonnes in September.
In Kenya, consumers currently pay between Ksh1,100 and Ksh1,600 to refill a 6-kilogramme gas cylinder, depending on the brand. A 13-kilogramme cylinder costs between Ksh2,200 and Ksh3,500.
The latest supply disruptions could further constrain LPG availability in Asian and African markets, including Kenya, which relies heavily on supplies from the Middle East to meet its cooking gas demand.
The anticipated price increase comes as the Kenyan government works to complete a major LPG storage facility in Mombasa, designed to boost the country's capacity to import, handle and store cooking gas.
Taifa Gas is in the final phase of constructing its LPG import terminal at the Dongo Kundu Special Economic Zone in Mombasa, with hydrostatic testing already underway ahead of commissioning.
The Ksh16 billion (€107.5 million) facility is expected to become the largest LPG storage terminal in East Africa, with capacity to hold 30,000 tonnes of gas in 12 spherical pressurised tanks.
The 30-acre facility has also been designed to allow for future expansion, potentially increasing its storage capacity to 45,000 tonnes.
