The discovery of significant natural gas reserves in Tanzania prompted the government to develop policies and regulatory frameworks for better management of this sector. Nevertheless, knowledge of how these policies and regulatory frameworks facilitate local community participation in the sector is scant and attention to these issues is limited. We use qualitative data and the Context Interaction Theory (CIT) as our lens to analyse the sectoral policies and regulatory frameworks to understand whether and how they facilitate local community participation. Our analysis revealed that the natural gas policies and frameworks have to some extent facilitated local community participation through provision of employment opportunities, participation in the implementation of Corporate Social Responsibility projects and protection of the gas infrastructures. However, meaningful local community participation is constrained by various factors including inadequate qualified and skilled individuals among the locals; misinformation to local community members; and insufficient awareness on the natural gas policies and regulatory frameworks. We recommend policies and regulatory frameworks that support local capacity development and empower local government authorities to develop their capacity for translating policies into practice on local community participation. These measures should involve ‘policy learning” from countries that have been successful in developing inclusive participation policies and responsive institutions.