Tanzania’s Natural Gas Revenue Surges to Sh358 Billion on Rising Demand
Dar es Salaam. Tanzania’s accelerating transition to natural gas has driven a dramatic increase in revenue from the Songosongo and Mnazi Bay fields, with earnings more than doubling over the past four years.
National Bureau of Statistics (NBS) data reveals that natural gas revenue surged from Sh137.013 billion in 2020 to Sh358.192 billion in 2024, reflecting the country’s growing embrace of cleaner and more cost-effective energy solutions.
The substantial growth is attributed to expanded natural gas utilization across multiple sectors, including domestic cooking, transportation, power generation, and industrial manufacturing.
Government infrastructure development has accelerated rapidly. Ministry of Energy budget documents for 2025/2026 show Tanzania’s natural gas pipeline network more than doubled from 102.54 km in 2020/21 to 241.58 km by April 2025, now serving 1,514 households, 13 institutions, and 57 factories.
The transportation sector has witnessed particularly strong adoption, with over 15,000 vehicles now operating on compressed natural gas (CNG), significantly reducing dependence on imported petrol and diesel.
Natural gas consumption has climbed correspondingly, rising from 59.83 billion cubic feet in 2020/21 to 82.91 billion cubic feet by April 2025. This expansion has alleviated financial pressure on households and transport operators by lowering operational costs and providing protection against volatile international petroleum prices.
Economist Abel Kinyondo identified two primary benefits driving natural gas adoption: substantially lower emissions compared to petrol, diesel, and kerosene, and reduced cost.
"As infrastructure continues to develop, natural gas will become even more affordable and environmentally friendly," he noted, emphasizing that improved accessibility will accelerate Tanzania’s progress toward Vision 2050 objectives.
Financial analyst Oscar Mkude attributed the revenue increase to ongoing Tanzania Petroleum Development Corporation (TPDC) investments in gas distribution infrastructure.
Beyond supplying the Kinyerezi power plants, TPDC now serves numerous industrial facilities, including the Dangote cement factory.
"Industrial gas usage will continue to bolster government revenue, as factories, Bajaj operators, and other transport services rely on it daily. Wider CNG adoption also helps protect Tanzania’s foreign exchange reserves by reducing dependence on imported petroleum products," Mkude explained.
He highlighted that CNG usage is expanding from Bajaj riders to private vehicle owners and recently to the Bus Rapid Transit (BRT) system.
The upcoming Liquefied Natural Gas (LNG) project represents a significant economic opportunity, potentially enabling Tanzania to export substantial volumes and generate considerable foreign exchange earnings.
Transport operator Ali Juma, who drives for a ride-hailing service, confirmed the financial benefits. One kilogram of CNG costs approximately Sh1,550, making a 15-kg refill roughly Sh23,000, compared to petrol at around Sh2,752 per liter. The proliferation of CNG stations across Dar es Salaam has also reduced wait times.
Resident Susan John of Malalkuwa noted that piped gas enables families to purchase only what they need, similar to prepaid electricity, helping avoid the financial strain of rising gas cylinder prices.
