KSh10 million fine, jail term, no permit for illegal LPG dealers

It will now require a permit for that cooking gas retailer at the neighbourhood shopping centre or supermarket to sell the product to the public. This retail license will be provided by the County Government.

Those who fail to comply with the new licensing rules will be liable to a fine of not less than KSh10 million, a jail term of five years or withdrawal of one’s license.

In a recent gazette notice, signed by Mr John Munyes, Cabinet Secretary for Petroleum and Mining, County Governments will be allowed to issue permits to retailers of liquefied petroleum gas in cylinders.

The new stringent licensing regulations by EPRA cover retailers, wholesalers and transporters of LPG.

“A person shall not undertake the business of retail of liquefied petroleum gas in cylinders except in accordance with the terms and conditions of a valid license issued by the County Government or its licensing agents. Where the County Government does not have capacity to issue the license, the Authority or its licensing agents shall issue the license,” said the rules in part.

A person who wishes to undertake liquefied petroleum gas business shall make an application for a license to the Authority or its licensing agents in the prescribed manner. The application shall be submitted electronically together with other documents that the authority may require.

The license shall remain valid in the case of a jetty, pipeline, bulk storage facility and liquefied petroleum gas reticulation system, for three years from the date of issue. In the case of retail of liquefied petroleum gas in cylinders, the license shall be valid for two years from the date of issue.

A person shall not construct or install a bulk liquefied petroleum gas storage facility or a gas reticulation system without a construction permit from the Authority.

The new licensing rules come at a time amid continued escalation of malpractices in the LPG business.

Industry figures indicate that seven out of every 10 cylinders in the market are sourced from illegal fillers – a trend that is causing massive unease in the LPG market.

According to lobbyist Petroleum Institute of East Africa (PIEA),  illegally filled gas cylinders are mostly underweight and lack cylinder validation and gas stench—a component that enables one to identify a leak.

Experts maintain that the magnitude of the LPG illegal business has become grossly dangerous and consumers can no longer be assured of their safety. For instance, most of the branded LPG cylinders that are stocked in majority of supermarkets and estate retail outlets have not been filled or supplied by brand owners.

Nairobi County alone has numerous illegal retailers and unknown number of illegal and unlicensed LPG storage and cylinder filling facilities.

The hurried introduction of the unified valve and regulator which was done in an environment where illegal refilling was already going on has been exploited as an avenue to legitimize illegal refilling and illegal cylinder rebranding.

The penetration of LPG in Kenya remains very low at about 8 per cent with most consumption of the product concentrated in the urban areas.

Official data from Ministry of Energy and Petroleum shows that on the national level, wood fuel and other biomass account for about 68 per cent of the total primary energy consumption followed by petroleum fuels at 22per cent, electricity at nine per cent and solar at less than one per cent.

Consequently, industry players are pushing the government to impose taxes on kerosene to deter many Kenyans from using the fuel and take up LPG.