Thursday, December 12, 2019
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LPG suppliers to boycott illegal retailers, as new regulations set in

The Petroleum Institute of East Africa has announced new measures against illegal cylinder refilling and retailers, to put them permanently out of business, with the country’s leading LPG suppliers saying they will boycott retailers who continue to resell their cylinders with other people’s gas in them.

“There is no ‘six-month transition period’ on illegal cylinder refilling,” said Mr. Olagoke Aluko, Chairman of the Petroleum Institute of East Africa, the professional body for the oil and gas industry. “It is illegal. It is ending. And anyone who wants to carry on in the face of a Sh10m fine and five years in prison will find that the legitimate LPG producers will not issue them a supply arrangement and will permanently boycott them.”

The LPG suppliers have moved to blacklist the illegal retailers as confusion has grown about the six-month transition period under the new LPG industry regulations gazetted in June 2019.

The regulations allow marketing companies until December to return their competitors’ cylinders. The marketers also have until year-end to put safe-use information onto each cylinder and to submit records of their current cylinder stocks to EPRA.

However, “allowing the legitimate industry time to return collected cylinders and implement the new safety rules doesn’t give illegal practitioners some extra window of time for illegality – the filling and hoarding of other brand’s LPG cylinders is illegal and the fines and jail terms are in force,” said the PIEA Chairman.

“Illegal refillers need to return any cylinders they have to the brand owners and cease operations, or the penalties will now be severe. There is no extra time.”

Under the new regulations, retailers must now have an agreement with the brands they stock that is proven by a letter and must be applying to EPRA for a licence.

“However, we will not issue brand agreements to retailers who are still sending our branded cylinders to illegal refillers,” said Mr Aluko.

The boycotting announcement by the LPG suppliers comes as the LPG regulator, the Energy and Petroleum Regulatory Authority (EPRA), has mobilised more than 80 inspection officers and started working with county governments to seek out and close down illegal refilling facilities.

The agency is also providing inspection briefs to other regulatory bodies including Kenya Bureau of Standards, Anti- Counterfeit Agency (ACA), Kenya Revenue Authority, Directorate of Occupational Health and Safety, National Environment Management Authority and County Executive Committees in energy, environment, and health across the country.

Prior to the new regulations, three-quarters of the LPG bought in Kenya was being provided by illegal refillers, according to data from the World Bank.

“The cost to citizens of unregulated refilling was intolerable. The safety breaches set Kenya back in its rate of LPG adoption and deterred investment in the industry on confused liability cases. This has seen Kenyans suffering more severely than other African countries from respiratory diseases and mortalities caused by the prolonged reliance on indoor cooking with firewood and charcoal. For all of these reasons, we welcome EPRA’s moves and will do all in our power to support the agency as it moves to close these illegal filling operations permanently,” said Mr. Aluko.

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