South Africa Gears Up for LPG Boom Amid Rising Electricity Prices

South Africa’s liquefied petroleum gas (LPG) industry is set for significant growth as new distribution hubs, increased electricity prices, and a transition from dirtier fuels drive demand, according to industry executives.

With state utility Eskom planning a 36% electricity tariff hike next year, LPG is becoming an attractive alternative for households. LPG operator Petredec recently announced the country’s first rail-supplied LPG project, and gas consumption has surged to 500,000 metric tons this year from 425,000 in 2022, according to Argus data.

Michael Kelly of the World Liquid Gas Association (WLGA) predicts exponential growth for South Africa‘s LPG market over the next five years, with other African countries like Ghana and Tanzania likely to follow suit as they transition from charcoal to cleaner fuels.

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PayGas, an energy tech company, is making LPG accessible with a pay-as-you-go model, allowing low-income households to buy small amounts. Customers like Busiswa Xelelo in Cape Town report that a 300-rand LPG refill can power cooking and heating needs for a month, outlasting electricity by weeks.