ERC shuts down 11 illegal cooking gas retail dealers
An attendant arranges gas cylinders at a Nyeri petrol station on May 22, 2013. Marketers, through the Petroleum Institute of East Africa (PIEA), said unlicensed gas operators are gaining an unfair advantage as they do not incur cylinder investment costs. PHOTO | FILE
What you need to know:
Oil marketers last month petitioned the ERC to extend the quality checks on fuel to include cooking gas resellers.
The marketers say unlicensed gas operators are gaining an unfair advantage as they do not incur cylinder investment costs.
But independent dealers reckoned that top dealers were keen on the campaign to chase them out of the market in a period that has seen them cut the stake of the oil majors.
The Energy Regulatory Commission (ERC) has shut down eight facilities in Nairobi and had three others demolished for illegal retail in cooking gas.
Most of the illegal facilities were found in the city’s Embakasi and South B areas, a report by the regulator showed.
“The exercise of closing and sealing identified unlicensed facilities will be expanded to the rest of the country and we target to complete the exercise in the next two weeks,” Linus Gitonga, the head of petroleum affairs at the ERC said.
Oil marketers last month petitioned the ERC to extend the quality checks on fuel to include cooking gas resellers.
But independent dealers reckoned that top dealers were keen on the campaign to chase them out of the market in a period that has seen them cut the stake of the oil majors.
The marketers, through the Petroleum Institute of East Africa (PIEA), said unlicensed gas operators are gaining an unfair advantage as they do not incur cylinder investment costs.
“We hope that the ERC will replicate this in the LPG business segment where we can also have inspection, monitoring and enforcement of ERC’s action,” said PIEA general manager Wanjiku Manyara.
The institute says that seven out of 10 gas cylinders in the market are illegally refilled posing danger to users.
The institute said the consumer ends up paying the same for genuine and illegal products in spite of the non-compliance on safety checks, cylinder re-validation, gas specifications, quantity and value added tax remittance.
Standardisation of cooking gas cylinder valves allowed the smaller independents to gain a foothold in the market previously in the grip of the large marketers as they could refill any cylinder.
The Energy Bill 2014 proposes raising the fines levied on unscrupulous gas traders from Sh5,000 to Sh1 million, amid complaints that the previous laws were lenient and encouraged the unlicensed trade.
Past attempts by ERC to crack down on the independent traders have been frustrated by Nairobi County.
ERC in a letter dated March 3 had called upon the county government to suspend licences of 84 LPG depots and retail points, saying inspections had found them flouting safety rules.
City Hall, however, declined to close them down on the grounds that the agency did not furnish enough evidence to back the claims. The independent dealers say most of the gas comes from major dealers who make a huge profit at the wholesale level.
