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Cooking gas re-fillers face probe over cylinder hoarding

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ERC Acting director petroleum department, Edward Kinyua. File Photo | Kanyiri Wahito | NMG

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Summary

  • Some firms are said to be taking advantage of the loosely regulated pooled cooking gas cylinder collection system.
  • The regulator also plans to start closely monitoring importation of cooking gas to ensure customers get the real product.
  • New mobile-based technologies will also enable consumers to confirm source of a refilled cooking gas cylinder.

The Energy regulator has turned to the anti-competition watchdog for help in investigating big cooking gas refill companies accused of hoarding empty cylinders to stave off competition from smaller aggressive rivals.

The unnamed firms are said to be taking advantage of the loosely regulated pooled cooking gas cylinders collection system put in place by the Energy Regulatory Commission (ERC), which is meant to facilitate smooth exchange among brand owners for refilling.

A workshop convened by the ERC Friday heard that two companies had since closed shop with two more tittering towards closure as they are unable to sustain their operations.

ERC director-general Pavel Oimeke said once the Competition Authority of Kenya (CAK) establishes that the major players are using unorthodox means to stifle competition, they will take stern action against them.

Severe penalties

ERC’s acting director (Petroleum) Edward Kinyua said they were banking on the new regulations where companies found hoarding cylinders belonging to their rivals will face severe penalties. The offence will attract a Sh20,000 fine per cylinder.

“Companies invest in manufacture and branding of cooking gas cylinders to build customer loyalty and do recoup their investment when they sell LPG gas to consumers. But when the cylinders go missing, it hurts a company’s business,” he said.

The regulator also plans to start closely monitoring importation of cooking gas to ensure customers get the real product.

“We are also reviewing the cylinders’ exchange pool rules where companies will be required to use foolproof information technologies that enable them to track movement of their cylinders from their stores to the retailers to eventual user,” he said.

Mr Oimeke said they had invited the CAK to investigate activities of some major players believed to be using unorthodox means to stifle competition in the subsector.

New mobile-based technologies will also enable consumers to confirm source of a refilled cooking gas cylinder, helping end incidents where illegal refill stations acquired and branded cylinders that are later released to the market for sale.

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