LPG supplier market competition “benefits” consumers in Mogadishu

[Deeq A.]

President Hassan Sheikh Mohamud inaugurating an LPG (Liquefied Petroleum Gas) storage facility in Mogadishu, May 2024.

Mogadishu (PP News Desk) — There is a discernible increase in the number of suppliers of liquefied petroleum gas (LPG) used for cooking in Mogadishu. This trend presents opportunities for breaking entry barriers in a business once viewed as capital-intensive and dominated by major players. The competitive landscape in this sector is marked by high customer service standards. A consumer can phone a supplier and receive an LPG cylinder in less than 30 minutes, creating job opportunities for delivery workers. Before the introduction of delivery services, LPG consumers had to go to supply centres to purchase and carry LPG cylinders home.

“The price of LPG cylinders has dropped due to competition between suppliers. Consumers stand to benefit from it,” a consumer in the Taleex neighbourhood of Hodan district told Puntland Post.

A female recipient receiving an LPG cylinder along with a stove.

The stiff competition in the LPG market in Mogadishu might prompt, as has happened before in other sectors, established companies to draw up acquisition strategies to buy smaller companies. If an acquisition or merger affects these companies, a price increase is likely to follow.

Stiff competition: Major players in the LPG supplier market in Mogadishu.

The use of LPG has had a positive impact on the reduction of deforestation caused by the cutting of trees for charcoal consumption. Between 2019 and 2021, the Federal Ministry of Environment and Climate Change subsidised the provision of 4,400 cylinders with stoves for families in the Federal Member States of the Federal Republic of Somalia.

© Puntland Post, 2024

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