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Economy

Illegal cooking gas traders fine increased above Sh10m

illegal cooking gas plant
Policemen at an illegal cooking gas plant in Karatina, Nyeri, during a crackdown on illegal refilling facilities in August last year. FILE PHOTO | NMG 

Penalties for illegal gas refiling has been increased more than tenfold to a minimum of Sh10 million in the fresh drive for safety and protect oil dealers.

The fresh regulations before Parliament is an upgrade of 2009 rules that provided a penalty of not more than Sh1 million or jail term of less than one year.

The rules also provide for a Sh10 million for those discharging bulk gas in a location that lacks regulatory approval.

It also caps transportation of gas cylinders in a car to three unless regulatory exemptions are issued in the fresh attempt to curb those dealing in illegal refills and sell the commodity at a discount of up to 25 per cent.

“Refilling, trading or rebranding of cylinders without the brand owner's consent — not less Sh10 million penalty,” Petroleum (Liquefied Petroleum Gas) Regulations 2019 say.

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The 2009 regulations have a blanket penalty and fines for the offences related to selling and transporting gas.

The penalty is a fine of not more Sh1 million or jail term of less than one year.

The proposed regulations have attached different fines for the breaches including a fine of more than Sh1 million for selling gas without permits or transporting the commodity in car not approved by the energy regulator.

Wholesalers who fail to keep gas cylinder records for more than year also face a fine of Sh50,000 for each offence.

The records include the serial number of each cylinder, date of purchase, weight of each cylinder and name of retailer buying the cylinders.

The stepping up of the fight against illegal LPG dealers comes in a period when gas prices are trading at levels in 2016 before the government removed value-added tax (VAT) on the clean fuel.

The cost of refilling a 13-kg gas cylinder at petrol stations has increased to about Sh2,200.

Prices stood at an average Sh2,231 in June 2016 and dropped to below Sh2,000 in October, four months after the scrapping of the 16 percent VAT.

The Treasury scrapped the tax on gas to cut costs and boost uptake among poor households that rely on dirty kerosene and charcoal for cooking.

Rising prices have egged on illegal dealers who offer a discount. Illegal possession of LPG seals without the cylinder brand owner's authority will see those caught fork out Sh20,000 for each seal.

Kenya has also stopped the current system that makes it mandatory oil marketers accept cylinders from rival brands to boost safety of consumers.

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