The Complete Guide to Starting and Operating LPG (Cooking Gas) Plant in Tanzania

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Can I be completely honest with you? Tanzania offers the largest and most growing market for LPG.

The annual LP gas consumption in Tanzania has grown from 5,500 metric tons in 2005 to 145,800 metric tons in 2019.

I don’t think there is anywhere in the world that has a kind of potential for LPG products like Tanzania. The market is crying for new investment.

Tanzania still has one of the lowest per capita LPG consumption in Africa. 

Many opportunities exist for increasing LPG penetration and utilization in the country.

Opportunities are abundant in Tanzania’s LPG value chain for entrepreneurs and investors who are looking to address supply constraints in the domestic LPG market in Tanzania through retail and wholesale distribution, LPG refilling plants, transportation, installation, and LPG bulk storage and operation.

The simple truth is that the initial capital of setting up an LPG plant is high. But with a great business plan, it is easier to secure the cooperation of both investors and money lending institutions.

This article shows you the challenges, opportunities, and requirements of starting an LPG plant in Tanzania

                                              What is an LPG PLANT? 

A Liquefied Petroleum Gas (LPG) refilling plant is a system that can be used either automatically or manually to refill LPG cylinders.

Starting and operating LPG Plant

A person interested in running LPG needs to go through town planning and acquire a land title deed. The next step is to carry out an environmental impact assessment (EIA). And this is done to ensure that the proposed LPG will not cause danger to the environment.

 The National Environment Management Council (NEMC) is the authority that will audit and award you a certificate once you comply with its standard.

You will also need fired department approval. Then you should apply EWURA to get approval to construct a petrol station.

Then should submit all documents to EWURA for construction permit. If EWURA inspectors see that your sites meet regulatory conditions, they will approve the construction permit. Afterward, you may start procurement of equipment and site construction.

 The authority will grant the approval to construct once you fulfill the land use laws and meet all health, safety, and environmental standards.

For investors is advisable to partner with local experts who has good industry knowledge, expertise and who are also versatile with relevant stakeholders.

 Building Requirement for LPG Plant

  • LPG pump/compressor shed
  • Office Building
  • Fireproof filling shed
  • Security cabin
  • Diesel Generator
  • Bore Well
  • Electrical system
  • Etc

Key to Success

Location is key to success in the LPGas business. You need to conduct a location potentiality assessment to ensure the location will be profitable for your business

Challenges and Risks

One of the biggest challenges in operating an LPG plant in the country is a shortage of qualified people to run the plant. There is simply a scarcity of competent personnel available in Tanzania to run the LPG plant. So when you employ people, you find someone who has little to no training or experience in the LPG operations. So  the risk associated with setting up LPG is having an operator who has insufficient knowledge.

I hope this helps.

+255(0)655376543  or hussein.boffu@tanzaniapetroleum.com

Hussein Boffu runs a consultancy helping elite entrepreneurs reach their goals through actionable business planning. Contact him via email at hussein.boffu@tanzanapetroleum.com or by calling, texting, or WhatsApp at +255(0)655376543.