How to Start an LPG Cooking Gas Business in Kenya.

March 17, 2025
Business Ideas

If you’ve ever considered starting a business in Kenya, you might have asked yourself: is an LPG cooking gas business really profitable? The short answer—yes. But as with any business, success depends on the right strategy, location, and customer service.

Let’s dive into why the LPG business is booming and how you can carve a niche in this growing industry.

The Growing Demand for LPG in Kenya

With urbanization and a shift toward cleaner energy, more Kenyans are choosing Liquified Petroleum Gas (LPG) over traditional fuels like charcoal and firewood. Even in rural areas, more households are making the switch for the convenience and efficiency that gas provides.

Here are some quick facts about Kenya’s LPG market:

  • Doubling Consumption: LPG consumption has grown from 200,000 metric tons in 2015 to over 400,000 metric tons by 2022, thanks to clean cooking initiatives.
  • Import Reliance: Kenya imports all its LPG, mainly from the Middle East, with most supplies entering through Mombasa’s Kipevu Oil Terminal.
  • Growing Distribution Network: Over 1,000 registered dealers exist, but a significant informal market thrives, especially in rural areas.
  • Future Growth: The LPG market is expected to exceed 1 million metric tons by 2030, presenting a lucrative opportunity for entrepreneurs.

With such promising growth, how do you set up a profitable LPG business?

How to Start an LPG Cooking Gas Business in Kenya

Step 1: Conduct Market Research & Choose a Business Model

Before diving in, research your target market. Look at demand, competition, and location viability. The key is finding an underserved area or offering better services than existing businesses.

Choose a business model that fits your capital and goals:

  • Retail LPG Shop: Sell pre-filled cylinders from a physical location—ideal for residential areas.
  • Mobile Delivery Service: Deliver gas to customers’ homes using motorbikes or boda bodas.
  • LPG Distribution: If you have significant capital, supply smaller retailers in bulk.
  • Hybrid Model: Combine a shop and delivery service for maximum reach.

Step 2: Get Licensed & Set Up Your Business

Starting an LPG business requires following government regulations for safety and compliance. Here’s what you need:

  • Register Your Business: Use the eCitizen platform to register your business name.
  • Get a County Business License: Costs vary by location and shop size.
  • Obtain a Fire Safety Certificate: Install fire extinguishers and follow LPG storage regulations.
  • Weights & Measures Certificate: Ensure your weighing scales are accurate and certified.

The initial setup cost for a small-scale LPG retail business ranges between KES 150,000 and KES 300,000, covering rent, licenses, and stock.

Step 3: Prioritize Safety & Customer Trust

LPG is highly flammable, making safety the backbone of your business. Follow these precautions:

  • Store cylinders in a well-ventilated and secure location.
  • Train staff on safe handling and emergency response.
  • Source only from certified suppliers to avoid counterfeit products.
  • Conduct regular cylinder inspections and offer safety tips to customers.

Customers will stick with a business they trust. Prioritizing safety not only protects lives but builds credibility.

Step 4: Build Customer Loyalty & Market Your Business

In the cooking gas business, repeat customers drive profit. Here’s how to keep them coming back:

  • Ensure consistent supply—running out of stock frustrates customers.
  • Offer home delivery for convenience.
  • Keep transparent pricing and avoid unfair markups.
  • Run promotions & loyalty programs—discounts on repeat purchases work wonders.
  • Use social media marketing—Facebook and Instagram ads can attract new buyers.

Additionally, word-of-mouth marketing is powerful. Satisfied customers will recommend your business to friends and family.

Step 5: Manage Finances & Scale Up

For long-term success, keep proper records of sales, expenses, and inventory. Consider investing in simple accounting software or hiring a bookkeeper.

To increase profits:

  • Negotiate better deals with suppliers.
  • Optimize delivery routes to cut costs.
  • Reinvest profits into expanding inventory or opening new locations.

How Profitable is the LPG Business?

Let’s break down the numbers:

  • Wholesale price of 6kg gas cylinder refill = KES 558
  • Retail price = KES 900 – KES 1,000
  • Profit per cylinder = KES 342 – KES 442

If you sell 10 cylinders daily, that’s a profit of KES 4,000 per day.

  • Wholesale price of 13kg gas cylinder refill = KES 1,209
  • Retail price = KES 1,800 – KES 2,000
  • Profit per cylinder = KES 750 – KES 950

Adding a few 13kg sales per day significantly boosts earnings.

On a good month, profits range between KES 90,000 and KES 180,000. Not bad, right?

Challenges & How to Overcome Them

  1. Price Fluctuations: LPG prices depend on global oil trends. Stay updated and adjust pricing strategically.
  2. Counterfeit Cylinders: Work only with reputable suppliers and educate customers about genuine products.
  3. Capital Constraints: If funds are tight, consider business loans or partnerships.
  4. Regulatory Compliance: Keep all licenses up to date and follow EPRA guidelines.

Managing Your LPG Cooking Gas Business with Pesabook

Running an LPG cooking gas business requires efficiency in tracking sales, managing expenses, and ensuring timely deliveries. With Pesabook, you can streamline your operations and focus on growth.

Here’s how Pesabook helps:

  • Track Income and Expenses: Record all sales and expenses, including restocking, transportation, and rent.
  • Automated Staff Payments: Ensure accurate and timely commission payments for delivery personnel and attendants.
  • Customer Management: Build a customer database, track purchase history, and send refill reminders.
  • Bulk SMS Marketing: Notify customers about new stock, promotions, or price changes.
  • Real-Time Reports: Generate daily, weekly, or monthly financial reports to optimize profitability.
  • Accessible Anywhere: Manage your LPG business from your phone or computer.

Why Use Pesabook?

Pesabook is simple, affordable, and tailored for small business owners. It helps you run your LPG business efficiently, giving you more time to focus on expansion. Visit Pesabook.com to sign up and optimize your operations today!

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