State cracks down on 'rogue' Liquefied Petroleum Gas operators

The State has shut 11 illegal cooking gas refilling plants in Nairobi as it moves to clamp down on unlawful Liquefied Petroleum Gas (LPG) business.

But there are concerns the move could kill competition and leave the cooking gas trade in the hands of multinationals.

The Energy Regulatory Commission (ERC) yesterday said all illegal LPG refilling facilities in Nairobi have either been closed down or demolished.

ERC's Director of Petroleum Linus Gitonga said the exercise would be expanded to other parts of the country within the next two weeks. He said the closed and sealed facilities would be handed over to the Ministry of Interior and Coordination of National Government.

"ERC will only consider licensing the above facilities or any other when the owners demonstrate compliance with the existing laws and standards," reckoned Gitonga.

In a statement, Gitonga warned all players to operate within the law.

"ERC remains committed to promoting fair competition and the safety of consumers by ensuring that all players operate within the existing laws and standards," he said.

Citigas Depot, Fastgas Depot and Richwel Depot were demolished while those closed and sealed include Consumer Gas Depot, Avian Gas Depot, Salama Gas Depot, Mapka Depot, Gazlin Depot, Gee Gas Depot, Eco Energy Depot and Clay Works Depot.

Mid-tier and small companies whose facilities are being demolished, however, view the development as  tantamount to unfair treatment by the State and accuse major oil traders of trying to use unethical practices to get rid of them and deepen their control of the lucrative LPG market.

Oil majors through their lobby group, the Petroleum Institute of East Africa (PIEA), claim that 80 per cent of the LPG market is illegal.

ERC, however, reckons that the major players have over time lost ground in the market and now want to reclaim their share, but are using regulation to shut down competition. Increasing competition in the LPG industry has seen the number of licensed players grow from six in 2009 to 23.