President Magufuli opens Sh150bn LPG facility

Dar es Salaam. Efforts to replace charcoal with liquefied petroleum gas (LPG) in domestic use received a big boost yesterday with the commissioning of a Sh150 billion LPG storage and filling facility in Dar es Salaam.

The facility in the city’s Kigamboni area was officially opened by President john Magufuli, and is expected to greatly increase LPG production for supply in both urban and rural areas where high charcoal use contributes to deforestation and environmental degradation.

The complex is owned by Taifa Gas Limited, which has also built 35 plans and storage facilities in Tanzania Mainland and Zanzibar since 2016.

President John Magufuli commended the investment, saying it was testimony to the government’s readiness to closely work with the private sector, adding that the use of LPG, which is also known as cooking gas, should be promoted across the country. “I’m told that gas is now available in 23 regions, and plans are afoot to reach all districts across the country. Take gas to the villages and increase the company’s market base.

“Since 60 per cent of the country’s population lives in rural areas and depends on charcoal and firewood as the main sources of energy, promoting gas use should play a key role in addressing environmental degradation,” Dr Magufuli said.

He urged Tanzanians, especially Dar es Salaam residents, to switch to gas, adding that about 40,000 bags of charcoal were used daily in the city, which is equivalent to 60 per cent of all charcoal used in the country.

Gas is much cheaper than charcoal, which costs an average family about Sh120,000 a month, President Magufuli said, adding that the same family could use one 15-kilogramme cylinder of gas costing only Sh47,000 per month.

The Head of State said eight companies dealing in LPG had helped to increase gas consumption in the country from 17,000 tonnes in 2010 to 92,500 tonnes in 2018, noting that Taifa Gas had boosted the country’s storage capacity from 8,050 tonnes in 2016 to 15,600 tonnes currently.

Dr Magufuli directed the Ministry of Energy to look into the possibility of supplying natural gas to Taifa Gas facilities and enable the firm to reduce its energy costs.

He also told the ministry to resolve pending issues related to bulk procurement of LPG and pricing following a request by the company’s chief executive, Mr Hamisi Ramadhan.

Taifa Gas board chairman Rostam Aziz earlier said that trust built by President Magufuli is now attracting many investors.

“Measures you have been taking prove that you believe in a private sector operating on a level playing ground, something that will create more jobs and generate revenue for improving social services and build infrastructure, which will help lift Tanzanians out of poverty,” he said.

For his part, Mr Ramadhan said the company was selling 2,000 tonnes of LPG to Kenya every month, and had in recent years extended its operations to Uganda, Rwanda, Burundi, the Democratic Republic of Congo and South Sudan.

He added that there were plans to tap into the South African Development Community (Sadc) market.

The new facility in Dar es Salaam has created hundreds of direct jobs and indirect employment for thousands of Tanzanians. “Our investment has created 260 jobs, out of which 130 are held by Tanzanian graduates. Over 3,500 others have been indirectly employed in the distribution chain,” Mr Ramadhan said.

The company, which is wholly owned by Tanzanians, was registered in 2015 when it had a storage capacity of only 1,650 tonnes. The firm changed its name from Mihan Gas to Taifa Gas following investment made between 2016 and 2018.