The reality in the energy sector is certainly set to hit both consumers and retailers this month despite reassurances from the energy watchdog.
After dismantling the liquefied petroleum gas (LPG) exchange pool that served the market fairly well late last year, new regulations have come into play that severely hamper the small retailer while effectively muscling up the power of the dominant oil marketing companies (OMCs).
The Liquefied Petroleum Gas (LPG) Act, 2019, which the Energy and Petroleum Regulatory Authority (EPRA) is confident will smooth the market, dictates amongst others that resellers have express authority of the OMC or other owner of cylinders to handle the product.
While there are serious underlying safety challenges that the regulations seek to address, it is obvious that Kenya’s cooking gas sector has gone back to the big boys’ regime.
On Wednesday, EPRA Director-General Pavel Oimeke expressed confidence that the multiplicity of licensed players will make sure that the prices remain stable. According to him, any player attempting to flex muscle will be displaced.
However, what he needs to tell consumers is how that is guaranteed with field dominated by large players at the top. The State ought to ramp up the capacity of small players by providing depot services and sanctions for dominant players who abuse their positions. That will reassure both consumers as well as small retailers in the sector.