Kenya: Vivo Energy Banks on Cheaper Ethanol to Tap Kerosene Consumers

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Vivo Energy, the retailer of Shell-branded fuel products, has entered a deal to supply low-income homes with ethanol cooking fuel as a cheaper alternative to charcoal and kerosene use.

In the deal with Koko Networks, agents selling liquid ethanol in the neighbourhoods will restock the fuel from Shell-branded petrol stations.

The oil dealer, which will source the fuel from both local and global suppliers, will also use small trucks to deliver it to points of sale.

Koko Networks has operations in India and East Africa and has since last year been piloting ethanol as a cleaner, cheaper cooking fuel among Kenyan urban poor.

“This product brings convenience and affordability to homes that rely on charcoal, kerosene and firewood as their main cooking fuel,” Koko chief executive Greg Murray said.

To use ethanol, homes will buy specially designed cookers at a cost of Sh4,500 for a two-burner with those who can’t afford the lump sum having the option of paying in instalments.

Refuelling will be through special canisters/cylinders with a capacity of 2.3 litres.

A litre retails at Sh85 and customers can refuel in small quantities from as little as Sh30.

Vivo managing director Joe Muganda said that the company’s entry into the ethanol cooking fuel segment serves to complement its LPG business (Afrigas cooking gas).

“We see ethanol as a natural complement to our LPG business, enabling more clean fuels to be offered to our customers,” said Mr Muganda.

The two firms seek to enrol about 1,000 agents in Nairobi estates in the first quarter of next year.

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