Kenya's petroleum infrastructure is handling record volumes on two fronts simultaneously, with export corridor throughput up 40% in two years and domestic Liquefied Petroleum Gas (LPG) consumption at its highest level since records began, as the pipeline network that underpins both expands regional footprint.
- •The transit corridor is the primary growth engine with Uganda accounting for approximately 65% of transit volumes through the Kenya Pipeline Company network and contributing roughly 35% of its revenues.
- •Uganda's cargo through the Port of Mombasa represented 65.7% of total port transit volumes in 2024, and more than 90% of Uganda's fuel imports move through Kenyan infrastructure.
- •Uganda's decision to take a strategic equity stake in KPC during its March 2026 NSE listing formalized what had already become a structural dependency, shifting Kampala from a transit customer to a co-owner of the infrastructure underpinning its fuel supply.
Since May 2024, Uganda National Oil Company has operated under a Transportation and Storage Agreement with KPC, moving petroleum imports from Mombasa to depots in western Kenya for onward road transport into Uganda, with volumes delivered to Uganda's reserves doubling between mid-2024 and early 2026.
EPRA data shows export-bound pipeline throughput growing from 1,610,569 cubic metres in H2 2023 to 2,253,624 cubic metres in H2 2025, a 39.9% increase across four biannual periods, with Kisumu, Nakuru and Konza depots all recording consistent growth.
The longer-term ambition is a 350-kilometre petroleum products pipeline from Eldoret to Kampala, with an option to extend a further 434 kilometres to Kigali. The project has been under negotiation since 1995 and remains unfunded, though former Kenya Pipeline Company managing director Joe Sang had described the extension as a strategic move to consolidate Kenya's competitive advantage in the regional export market as Uganda develops alternative import corridors.
LPG Record Breaking
On the domestic side, LPG consumption reached 414,861 metric tonnes in FY2024/25, nearly three times the 148,600 metric tonnes consumed a decade earlier. The H2 FY2025/26 biannual figure of 251,425 metric tonnes is the highest in the series. Energy regulator projects demand reaching 589,000 tonnes by 2029, a 7.3% annual growth rate, against a government target of raising LPG penetration from 24% to 70% by 2028.
The Finance Act 2023, which removed VAT, a 2% railway development levy and a 3.5% import declaration fee on LPG from July 2023, provided an initial price stimulus: a 13 kg cylinder fell from KSh 3,069 in June 2023 to KSh 2,787 in July. That relief proved short-lived with prices rallying back above pre-tax levels by December 2023, driven by shilling depreciation and institutional demand from the government's school LPG programme absorbing available supply.
The sustained consumption growth reflects structural drivers: a long-run transition away from kerosene, expanding distribution infrastructure and institutional uptake rather than durable retail price relief.
The infrastructure supplying that growth is undergoing its most significant competitive disruption in years. Africa Gas and Oil Ltd, owned by Mombasa tycoon Mohamed Jaffer, has controlled more than 90% of Kenya's imported LPG market for over a decade through its 25,000-tonne Mombasa terminal.
That grip is loosening with Lake Gas, part of the Lake Group founded by Tanzanian tycoon Ally Edha Awadh, completed a 10,000-tonne terminal at Vipingo in Kilifi County in 2025, capturing approximately 2% of import volumes and driving wholesale LPG prices in Mombasa from KSh 100 per kilogram in January 2025 to KSh 83 by October. Lake Gas plans a second 15,000-tonne facility at the same site.
Two further terminals are in development with Taifa Gas, owned by Tanzanian billionaire Rostam Aziz, receiving final court clearance in November 2025 to proceed with a 30,000-tonne facility at Dongo Kundu Special Economic Zone in Likoni, valued at US$130.5 million, with construction underway since February 2023.
Separately, KPC has entered a joint venture with Nigeria's Asharami Energy to develop a 30,000-tonne terminal at Changamwe. When both are operational, Kenya's LPG import receiving capacity will more than triple from its current 37,335 tonnes across Mombasa and Kilifi, introducing competitive pressure on handling fees that have historically faced little challenge.
