Across-the-brand sale of cooking gas begins

Cooking gas buyers will from Tuesday be free to exchange their cylinders at any Total, Oil Libya, KenolKobil, BOC, Shell and National Oil outlets regardless of brand, in a move aimed increasing access to the product and bring down prices.

The six outlets are members of the newly-established liquefied petroleum gas (LPG) exchange pool, who have been vetted and certified as having met environmental, legal and safety standards besides paying an indemnity for risks involved in the business.

Low uptake of LPG has been a major concern for energy sector policy makers under pressure to reduce Kenyans’ heavy reliance on firewood and its negative impact on the environment.

The use of specialised regulators and branding have been blamed for the continued rise in the cost of cooking gas despite Treasury tax incentives.

Branding has also been seen to undermine competition by making it costly for consumers to change suppliers in the marketplace.

It is expected that fitting of the cylinders with uniform valves will bring down operational barriers, leaving pricing and quality of service as the only competitive fronts.

But critics said the objective is going to be undermined by the newly-created exchange pool, which they fear will be turned into a platform for fixing prices turning its members into a cartel.

The Energy regulatory Commission (ERC) yesterday announced that the team responsible for the execution of the cylinder exchange plan was ready for the task, paving the way for free sale of gas beginning this on Tuesday.

“The process of interchanging the cylinders will commence with effect from December 1, amongst those companies that are members of the Liquefied Petroleum Gas Exchange Pool,” said Kaburu Mwirichia, the ERC director general.

A team of Kenya Bureau of Standards (Kebs), Energy ministry officials and marketers’ representatives have been working on the transition to uniform valve cylinders.

Other marketers will be admitted to the pool when they meet the set conditions, which include training workers in LPG management, having at least 5,000 cylinders in the market, paying a public liability fee of Sh50 million, executing a security bond of Sh5 million and filling the vessels at licensed plants.

The firms can be expelled from the pool for failing to maintain high environmental, health and safety standards or contravening any of the standards, according to the ERC.

Mr Mwirichia said the regulations also require new firms in the business to apply to apply for membership if they were licensed by ERC.

“It will be illegal for any company to fill another marketer’s or brand owners cylinders.”

The rules, formulated after Parliament passed a law seeking to bring down the cooking gas market silos, also seek to improve consumer rights by allowing them to confirm the weight of the cylinders at the point of sale.