HomeIndustry SectorsCustomer ServicesPay as you gas now even more affordable in South Africa

Pay as you gas now even more affordable in South Africa

Customers who cannot afford to refill an entire gas cylinder will now have the option to buy nominal amounts of LPG at a Pay as You Gas station.

In South Africa, LPG supplier Afrox has signed a supply agreement with PayGas to offer easier, flexible access to low-income households who cannot always afford a full gas cylinder.

Launched in 2018, PayGas uses proprietary technology that fractions gas purchases into smaller quantities, making the purchase process more flexible and affordable.

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The technology is powered by a pay-as-you-go Unstructured Supplementary Service Data (USSD) software payment platform combined with a cashless refilling station and mobile app, connected to a barcode on the customers’ cylinders.

The PayGas user buys a prepaid voucher via their cell phone at any spaza shop or the closest Pay as you Gas station. They then use the PayGas app to fill their Afrox Safety Gas cylinder, totally or partially, for as little as R10 (approximately $1), at a Pay as you Gas station.

Gerhard van Wyk, the business manager LPgas at Afrox, says the gas company had identified a wide scope for growth in the informal and domestic LPG market in South Africa, and that PayGas’ vision, mission and values align with Afrox’s goal to offer sustainable energy solutions that foster greater choice and responsible energy consumption.

Though many households in South Africa have access to electricity, wood and paraffin are still extensively used for cooking and heating because of power shortages and the increasing cost of electricity.

Wood and paraffin can be bought in smaller quantities but traditional LPG (though a safer and more sustainable fuel option) means purchasing a full cylinder at a time, problematic for households with irregular incomes.

However, a Pay as you Gas system allows the customer to purchase a small amount of gas at a time, encouraging low-income households to switch to clean, affordable energy.

Purchasing pay as you go gas in the neighbourhood

In April 2019, PayGas rolled out a pilot Pay as you Gas station in Delft, Cape Town servicing more than 4,000 low-income residents in the township and there are plans to expand well beyond the Mother City (Cape Town’s informal name).

“With Afrox’s LPG supply, support and expertise, we can now execute an ambitious plan to roll out several Pay as you Gas stations catering to close to 200,000 customers across major townships in South Africa in the next 36 months,” said Philippe Hoeblich, Founder and CEO at PayGas.

“I founded PayGas in response to a gaping need for flexible affordable cooking energy for lower-income households in urban areas in South Africa and we can’t wait to execute on our ambitious plans to cater to more households in more cities in the country.”

Together with Afrox and through a micro-franchising with Pick ‘n Pay Market Stores owners, PayGas plans to roll out five new Pay as you Gas stations within the next six weeks, including Philippi Village, Gugulethu, Nyanga, Langa and Kayamandi.

PayGas also plans to roll out three additional stations in Johannesburg plus two in Durban during 2021.

Afrox will install LPG dumpy tank storage vessels at each Pay as you Gas station, shaped in a unique ready-to-use container developed by PayGas, and supply each station with approximately 2,500 cylinders to ensure sufficient cylinder stock.

Their lighter and more portable 5kg Safety Gas cylinders were specifically chosen for this market where residents often have to carry cylinders from gas depots to their homes.

Theresa Smith
Theresa Smith is a Content Specialist for ESI Africa.