Kenya will in June roll out a new system to automatically track cooking gas cylinders in the latest effort to combat a thriving black market in the multi-billion shilling sector.
This will either be done through an Internet of Things (IoT) or Radiofrequency identity (RFID) chips, offering a full view of cooking gas from the import point, refilling stations and end-consumers.
An IoT is a network of physical devices, vehicles and appliances that are embedded with sensors, software and network connectivity, allowing them to collect and share data.
An RFID refers to a wireless system comprising two components: tags and readers. The reader in an RFID has one or more antennas that emit radio waves and receive signals back from the RFID tag which helps to automatically monitor the names and locations of a device.
This will be an upgrade from the current state where the government is only relying on receipts issued by fuel stations upon refilling or purchase of cooking gas. Automated tracking will give the Energy and Petroleum Regulatory Authority (Epra) and other State agencies an upper hand in the fight against illegal refilling and a host of other unauthorised activities in the sector.
“We are looking at tracking the cooking gas cylinders which will help us monitor it from the source to destination. This will start in June, we have a deadline on the need to track every kilo of imported LPG to know where it ends up,” Edward Kinyua, the Petroleum and Gas Director at Epra said.
The State reckons that deploying the automated tracking will make it easy to identify illegal refilling stations and significantly curb the black market in the estates and informal places. Illegal refilling of cooking gas has led to accidents that have claimed lives and huge losses for businesses in the form of burnt premises.
A black market in the sale of Liquid Petroleum Gas (LPG) is one of the State's biggest headaches due to lack of adherence to safety requirements.
LPG consumption grew eight per cent last year as more homes and businesses opted for clean cooking. Official data shows that consumers used 360,590 tonnes of LPG last year, up from 333,820 recorded in 2022.
Cooking gas dealers are required to issue receipts for every sale and refill made, failure to which they are fined Sh50,000. The receipt includes the name and telephone number of the seller, contacts of the consumer, cylinder brand, date of sale as well as serial numbers of the seal and gas container.
The regulations also demand that oil marketers provide an insurance cover for each cylinder for compensation in case of accidents.
Penalties for illegal gas refilling were in 2019 increased more than ten-fold to a minimum of Sh10 million, in a safety drive and to protect oil dealers. This comes at a time when the industry is attracting new players wishing to build berths for handling LPG imports, as the country moves to open up the sector ahead of the price control regime in 2025.
Epra received applications from existing and new players, including the Kenya Pipeline Company (KPC), Eleven Energy and Fossil Fuels, that will bring competition and reduce control of the sector by a few players.
Tanzanian business magnate Rostam Aziz, the owner of Taifa Gas, last year entered the Kenyan market with a plan to have a 30,000-tonne cooking gas handling facility in the Dongo Kundu Special Economic Zone.
