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Economy

Gas sellers raising prices on corona risk losing licences

Cooking gas cylinders.
Cooking gas cylinders. In the low-cost project, cylinders were to be refilled at National Oil. FILE PHOTO | NMG 

Cooking gas dealers are taking advantage of increased demand from consumers forced to stay at home by the Covid-19 outbreak to increase the price of cylinder refilling.

Unlike other petroleum products, the price of liquefied petroleum gas (LPG) is not controlled hence open to manipulation with concerns that dealers are now exploiting market forces to their advantage even as international crude prices continue to fall.

A spot check in Nairobi shows a wide disparity with some refilling the 13kg cylinder at Sh2,300 while others charge Sh2,050.

Petrol stations are selling the gas at between Sh2,050 and Sh2,150.

The Energy and Petroleum Regulatory Authority (Epra) said it was investigating the matter after receiving complaints in the wake of business disruptions caused by the virus outbreak.

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Epra director general Pavel Oimeke said the deviations were easy to notice and action will be taken on those exploiting consumers.

“We have had reports of such exploitation going on in the market. Epra enforcement teams will be doing surveillance and recommending revocation of LPG retail licences for those found to have hiked prices. We know the average price for all cylinders and deviation is noticeable,” Mr Oimeke said.

Epra earlier warned traders to stop the malpractice and ordered them to issue receipts bearing details of retailers and buyers as well as dates of transactions in compliance with the Petroleum (Liquefied Petroleum Gas) Regulations of 2019.

Consumers would then find it easier to use the receipts to claim exploitation from the traders through Epra for action.

The LPG regulations prescribe a Sh50,000 fine for selling cooking gas without receipts as a measure to curb illegal trading.

LOW CRUDE PRICES

The receipt is also expected to include cylinder brand as well as serial numbers of the seal to help track the cylinder from the retailer.

These records are expected to be kept for at least one year.

The new rules also cap the number of cylinders that can be transported in a car to three unless regulatory exemptions are issued in a fresh attempt to curb those dealing in illegal refills and selling the commodity at a discount to undercut other traders.

LPG prices are expected to fall in line with the price of crude oil, which is almost at a two decade low, while demand is expected to rise slightly as more Kenyans stay at home following the Covid-19 outbreak.

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