Kenya Petroleum Technical Assistance Project (KEPTAP)
Enhancing LPG penetration in the country from the current 10% to a minimum of 70% by the year 2023. This translates to an increase from 2 kg/capita to minimum 7 kg/capita
CLIENT: Ministry of Industry, Trade and Cooperatives | Ministry of Petroleum and Mining | National Oil Cooperation of Kenya
PROJECT SPONSOR: World Bank and Government of Kenya
ASSOCIATING PARTNER: Peeply (Socialcops)
The Government through the Ministry of Petroleum and Mining (MoPM) and the Ministry of Industry, Trade and Co-Operatives (MoITC) has been working with the National Oil Corporation Kenya (NOC-K) to enhance LPG penetration in the country as well as ensuring universal access of LPG in Kenya by the year 2020.
To support this project MoPM committed to purchasing 1.2 million 6 kg cylinders every year for four years. The cylinders will be distributed by NOCK to households that would hitherto not have afforded them. These cylinders are to be availed to the target households at a discount of up to 65% per cylinder. It is expected that NOCK LPG market share will shift to 30% by 2020.
At the consultancy’s inception i.e. in Jan 2018, the vast majority (over 75%) of Kenya’s households used biomass as their primary fuel. This has had a negative impact on the environment from deforestation for charcoal and firewood, to negative impacts on health particularly respiratory health due to indoor pollution as well as the overall impact on the quality of life for Kenyans.
In this regard, the Government has embarked on enhancing LPG penetration in the country to scale up uptake of LPG to 70% over a four-year period. This was aimed at reducing the carbon footprint (negative climatic effects such as deforestation) in Kenya, as well as negative health related effects (e.g. respiratory diseases) and enhancing the quality of life of Kenyans. The following were the specific development objectives:
A key challenge that was been identified in successfully achieving these objectives as well as ensuring the sustained LPG uptake of the additional 1.2 million bottles provided by GoK every year, was the lack of a clear distribution model to be implemented by NOCK. In response to this, this consultancy, through the World Bank Kenya Petroleum Technical Assistance Project (KEPTAP), engaged ACAL in partnership with Social Cops (Peeply) to support NOC-K in the development of a robust distribution model to ensure that the GoK’s objective of enhancing LPG penetration realised.
The overall objective of the our approach was to develop a comprehensive eligibility & distribution model for the discounted LPG cylinders taking into account the following:
This consultancy kicked off in July 2018 and ran all through to February 2020. During this period ACAL undertook desktop research, legal and regulatory framework review, benchmark studies, a market assessment, a national study, several stakeholder engagements and workshops with the primary objective of enhancing NOCK’s distribution model to accommodate an additional 1.2 million cylinders annually.
Our approach spanned across the following three phases and entailed the following key steps: