Africa’s growing demand for cleaner cooking fuel is opening up investment opportunities in the petroleum sector, with Liquefied Petroleum Gas (LPG) emerging as one of the continent’s most promising downstream markets.

Despite increasing demand, nearly one billion Africans still rely on firewood and charcoal for cooking, exposing millions of households to harmful indoor air pollution and contributing to environmental degradation.

According to the International Energy Agency (IEA), household air pollution kills approximately 815,000 people annually in Africa, highlighting the urgent need to expand access to cleaner cooking alternatives.

At the IEA’s first Summit on Clean Cooking in Africa, held in Paris in May 2024, former African Development Bank president Akinwumi Adesina recounted how growing up studying by smoky lamps and cooking fires affected his eyesight.

The challenge remains significant.

Between 2022 and 2023, sub-Saharan Africa’s population increased by 30 million people, but only 11 million gained access to clean cooking facilities.

Anibor O. Kragha, the executive secretary of the African Refiners and Distributors Association (ARDA), says investment in LPG infrastructure could help address the challenge while creating substantial economic opportunities.

He argues that while refining has dominated Africa’s petroleum industry for years, LPG is emerging as the next major investment frontier.

The opportunities, he says, extend beyond importing the fuel to developing gas-processing facilities, storage terminals, bottling plants, cylinder manufacturing, transportation and distribution networks.

Growing demand, inadequate infrastructure

LPG currently accounts for 76 per cent of people gaining access to clean cooking in sub-Saharan Africa.

However, consumption remains relatively low compared with other regions. The region consumed 6.4 million tonnes of LPG in 2025, equivalent to 4.8 kilograms per person, compared with more than 50 kilograms per person in North Africa.

Demand grew by 12 per cent last year, with CITAC Africa projecting that consumption could nearly triple to 17 million tonnes by 2045.

The growing population is expected to further increase demand, with Africa projected to account for one in every four people globally by 2050.

However, the region’s supply infrastructure remains inadequate to support the anticipated growth.

Although the United States is Africa’s largest LPG supplier, no sub-Saharan African terminal can currently receive a full Very Large Gas Carrier (VLGC) shipment of approximately 45,000 tonnes.

Only about 20 LPG storage facilities across the continent have capacities of at least 10,000 tonnes, while available stocks in many markets can cover ten days of demand or less.

Consequently, most African countries rely on smaller spot-market purchases, which expose importers and consumers to fluctuating international prices.

The vulnerability of the supply chain was demonstrated in 2026 when the closure of the Strait of Hormuz triggered sharp increases in import prices across East and West Africa.

Prices rose by between 70 and 100 per cent above their 2025 averages, illustrating how disruptions in international supply routes can affect households.

Kragha warns that when LPG prices become unaffordable or supplies run out, households often return to charcoal and firewood.

He argues that expanding clean cooking access will therefore depend not only on distributing cooking equipment but also on establishing reliable and affordable fuel supply systems.

Investment opportunities across the value chain

According to ARDA, investment is required at different stages of the LPG supply chain.

These include gas processing and refining to increase the amount of LPG retained within African markets, large import terminals capable of receiving VLGC shipments, strategic storage facilities, bottling plants and cylinder manufacturing.

Other opportunities include transportation networks serving landlocked countries and last-mile distribution systems that make the fuel accessible to households.

The association notes that Africa exports approximately 10 million tonnes of LPG annually, despite the growing demand for the product within the continent.

It argues that retaining more of this supply for domestic and regional consumption could strengthen energy security and reduce dependence on expensive imports.

Smaller cylinders, particularly those holding between three and six kilograms, as well as cylinder recirculation and pay-as-you-go arrangements, could also help lower the cost of accessing LPG for low-income households.

The IEA estimates that achieving universal access to clean cooking in Africa would require approximately $2 billion annually by 2040, representing less than 0.1 per cent of global energy investment.

However, Kragha says the major challenge is not necessarily a shortage of capital but the absence of sufficiently developed and financially viable investment projects.

He argues that development programmes have often concentrated on financing cooking stoves without adequately supporting the infrastructure required to ensure a consistent supply of fuel.

Who should invest?

ARDA says developing Africa’s LPG market will require partnerships involving international suppliers, commodity traders, African national oil companies, development financiers and local distributors.

United States producers, which supply much of Africa’s imported LPG, could support the development of import infrastructure through long-term supply agreements and predictable pricing arrangements.

International trading companies such as Petredec, Vitol and Trafigura could also contribute through their shipping capacity, financial resources and experience in managing regional supply chains.

Gulf countries, including Saudi Arabia, could provide investment capital and cargo financing through their national oil companies, sovereign wealth funds and trade finance institutions.

Saudi Arabia’s Oil Sustainability Program, through its Forward7 initiative, already supports LPG access and clean cooking programmes.

Chinese investors are also showing interest in Africa’s petroleum industry.

In April, Nigeria’s national oil company, NNPC, signed a memorandum of understanding with Sanjiang Chemical and Xinganchen (Fuzhou) Industrial Park for a potential equity partnership to revive and expand the Port Harcourt and Warri refineries.

The proposed investment also includes petrochemical and gas-based industrial hubs.

African national oil companies could contribute land, port facilities, domestic gas supplies and government partnerships, while local LPG distributors would provide access to consumers and regional markets.

Companies such as Oryx Energies, Sahara, Ardova and Rainoil are among the African marketers identified as having the experience and distribution networks needed to expand the market.

Oryx Energies, which is now African-led following a management buyout, opened Zanzibar’s first LPG import terminal in 2024.

ARDA proposes a regional investment model in which international traders manage operations, American producers provide long-term supply agreements, African national oil companies offer host-country partnerships, while Gulf investors and development financiers provide capital.

Local distributors would then connect the infrastructure to households and businesses.

Countries with potential for investment

Nigeria, Côte d’Ivoire, South Africa and Angola account for more than half of sub-Saharan Africa’s LPG demand, making them important markets for investors.

Nigeria consumes approximately 1.4 million tonnes annually and has set a target of increasing consumption to five million tonnes by 2030.

With the Dangote refinery expected to reduce the country’s dependence on imported petroleum products, investment opportunities are shifting towards gas processing, storage, bottling and distribution.

Côte d’Ivoire recorded 12 per cent growth in LPG consumption in 2025, while South Africa registered 15 per cent growth.

South Africa is also developing a 30,000-tonne LPG terminal in Durban, with plans for a rail distribution hub serving Gauteng.

Angola, which is a net LPG exporter, could become an important regional supplier following the development of the Barra do Dande terminal.

Beyond these established markets, coastal countries could develop import terminals serving neighbouring landlocked countries.

Kenya’s port of Mombasa, for instance, could supply Uganda, Rwanda, South Sudan and the Democratic Republic of Congo.

Taifa Gas is completing a VLGC-capable terminal in Kenya, while the country’s LPG consumption remains below its target of 15 kilogrammes per person.

Tanzania could serve Zambia, Malawi, Burundi and parts of the Democratic Republic of Congo through its coastal infrastructure.

Petredec’s VLGC-capable terminal in Tanga is expected to be completed in 2027.

Angola could also supply the Democratic Republic of Congo and Zambia through the Lobito Corridor, while Côte d’Ivoire and Ghana could serve markets in the Sahel region.

Ghana has set a target of achieving 50 per cent LPG penetration by 2030.

Untapped markets offer further opportunities

The Democratic Republic of Congo and Ethiopia are among the continent’s largest untapped LPG markets.

Together, the two countries have populations exceeding 250 million people but consumed only approximately 25,000 and 28,000 tonnes of LPG respectively in 2025.

Their combined consumption is barely equivalent to one VLGC shipment. In Kinshasa, the capital of the Democratic Republic of Congo, charcoal remains a major cooking fuel.

ARDA argues that investors who establish reliable supply routes into these markets could secure a significant share of future demand.

ARDA seeks to connect investors and financiers

To address the financing and coordination challenges, ARDA is positioning itself as a platform connecting governments, regulators, investors, companies and development finance institutions.

Now in its 20th year, the association has approximately 85 members across Africa.

Through its Investment Forum, ARDA evaluates proposed projects based on sustainability, regulatory support, economic viability, technical feasibility and the capacity to execute them.

Projects considered commercially viable are then linked to potential financiers, including Afreximbank, the Africa Finance Corporation, Standard Bank and Mauritius Commercial Bank.

The association is also working with the Global LPG Partnership to develop a $1 billion clean cooking investment fund, with large import terminals identified as a priority investment category.

It is further advocating for harmonised safety regulations, cost-reflective pricing, shared infrastructure access, minimum stock requirements and standardised supply contracts to reduce investment risks.

ARDA also supports wider use of partial risk guarantees, which currently account for only five per cent of international public clean energy financing to developing countries.

Through partnerships with CITAC, Argus, S&P Global, the World Liquid Gas Association and the IEA, the association provides market information to help investors assess demand and avoid developing infrastructure that could become underutilised.

The race for Africa’s LPG market

Kragha says the next phase of Africa’s downstream petroleum development will be determined by investors willing to commit resources to infrastructure connecting available fuel supplies to growing markets.

He notes that Chinese investors are increasingly exploring opportunities in Nigeria’s refining and gas industries, while the United States and Saudi Arabia are promoting clean cooking initiatives in Africa.

However, large-scale investments in LPG import terminals and distribution infrastructure remain limited.

He argues that investors who move early could secure strategic port locations, supply agreements and customer networks in a market projected to nearly triple by 2045.

The association will bring industry players together at its third LPG Forum in Dar es Salaam, Tanzania, on November 24 and 25, 2026.

The forum will be held under the theme, Unlocking Africa’s LPG Potential: A Catalyst for Industrialisation, Energy Security and an Inclusive Energy Transition.

The meeting is expected to explore investment opportunities, financing arrangements and partnerships needed to expand LPG infrastructure across the continent.

For Africa, the challenge is no longer simply whether clean cooking fuel is available, but whether governments and investors can develop the infrastructure to make it affordable and accessible to millions of households.

As Kragha argues, the investors who act early could help shape the continent’s LPG market for decades to come.