Exploring Profitable Paths: Six LPG Business Opportunities in Tanzania

/in /by


When I was a kid, I was told that the source of energy was firewood. We used it to cook and do everything.
By the time we got used to firewood, the government announced that gas was now _the_ clean source of cooking energy.
It was a bit tough for many Tanzanians to embrace this new source of cooking energy.

Quite a number of people in Tanzania feared that LPG was highly explosive and could endanger their home. Also, it was seen as a luxury reserved for the rich.


The awareness of the social benefits of using LPG was low among the beneficiaries. So, the annual consumption of LP gas in Tanzania was only 5,500MT in 2005.


Entering into the LPG business in Tanzania at those times was unprofitable because the market demand for cooking with LP gas was too small and Tanzanians were unwilling to pay for it.


With regular awareness campaigns now, there has been a steady increase in the number of households using LPG. Today, most people in Tanzania are aware of the LPG as a clean and healthy source of domestic cooking energy, and they are moving away from charcoal and firewood.


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


With this steady upward movement of LPG consumption in Tanzania, investing in the LPG business can be one of the best business ideas to pursue in Tanzania right now. Why? Because the LPG has become a constant domestic requirement for households (families), lodges, restaurants, schools, colleges, hotels and industries.

Six LPG Business Opportunities in Tanzania

 

There are several profitable business opportunities in Tanzania’s LPG sector. Here are a ideas:

1. LPG Distribution: Start a business that focuses on distributing LPG cylinders and related equipment to households, businesses, and industries. You can establish a network of distribution points and build partnerships with LPG suppliers.

2. LPG Retail: Set up retail outlets where customers can buy LPG cylinders, accessories, and cooking appliances. This can be done in urban areas or in areas with limited LPG access. Consider offering additional services like refilling, maintenance, and repairs.

3. LPG Conversion: Offer conversion services for vehicles from traditional fuels to LPG. This could target taxis, buses, and other commercial vehicles. As LPG is known for being more environmentally friendly and cost-effective, there is potential demand for such services.

4. LPG Infrastructure Development: Invest in infrastructure development, such as building LPG filling stations and storage facilities. This can supply LPG to retailers, industries, and large-scale consumers like hotels and restaurants.

5. LPG Cylinder Manufacturing/Refurbishment: Establish a facility for manufacturing or refurbishing LPG cylinders. This can help meet the growing demand for cylinders or provide cost-effective solutions for reusing and maintaining existing ones.

6. LPG Safety and Training: Start a business focused on providing safety training and equipment to LPG users. This can include educating customers on safe handling, storage, and usage of LPG, as well as supplying safety accessories like regulators and gas detectors.

Remember, before starting any business, it is essential to conduct thorough market research, understand the regulatory framework, and assess the competition in the LPG sector in Tanzania.

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.