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Economy

Cooking gas firms avoid cylinder exchange pools

Only one cooking gas cylinder exchange pool application has been received by the energy regulator
Only one cooking gas cylinder exchange pool application has been received by the energy regulator more than eight months since the government collapsed the cross filling of cylinders. FILE PHOTO | NMG 

Only one cooking gas cylinder exchange pool application has been received by the energy regulator more than eight months since the government collapsed the cross filling of cylinders by Liquefied Petroleum Gas (LPG) dealers.

The slow pace signals a resolve by cylinder brand owners to go it alone under the new Liquefied Petroleum Gas (LPG) regulations that restrict exchange of one brand for another during refill.

The move means consumers will still contend with the narrowed option of having their cooking gas refills done by the brand owners under the new LPG regulations.

The Energy and Petroleum Regulatory Authority (Epra) director general Pavel Oimeke said the low application for mutual cylinder exchange by the dealers will not hurt LPG penetration since more distributors were being recruited.

“We have one proposed Mutual Exchange Pool whose proponents have commenced the approval process by applying to the Competition Authority of Kenya (CAK). The lack of a Mutual Exchange Pool will not deter penetration of LPG since already the Epra has licensed 68 brand owners whose distribution outreach covers the entire country,” Mr Oimeke told Business Daily.

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“Epra continues to receive more applications from new brand owners and this is a positive indicator of continued steady growth in the sector.”

Such applications have to pass through CAK before the firms can be allowed by the Epra to start refilling cylinder brands within the pool.

The revised Energy (Liquefied Petroleum Gas) Regulations of 2009 abolished the mandatory cylinder exchange pool to make LPG players accountable for their own cylinders, and tame illegal dealers accused of hijacking cylinders and refilling them without investing in manufacturing while undercutting genuine dealers.

Genuine gas sellers thus lost cylinders under the common pool with the value owed to another said to have ballooned to more than Sh1 billion when the exchange plan was folded.

Only 23.9 percent of households in Kenya use LPG for cooking while the rest use firewood and charcoal, according to government data.

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