Confusion in LPG sector regulation hurting Kenyans

Thursday, March 5th, 2020 00:00 | By
Gas. Photo/Courtesy

Wanjiku Manyara       

At the heart of every regulatory process is the regulator, implementation and enforcement. Any law is as good as its application.

A case in point is Legal Notice, LN100, gazetted in June 2019 meant to govern the Liquefied Petroleum Gas (LPG) industry.

It seeks to put an end to the mandatory interchange of one brand of gas cylinder for another as part of efforts to tame illicit trade, including illegal refilling, rebranding, reselling, storage, and transporting of LPG.

The former Legal Notice 120 was made with good intentions. However, while the interchangeability of cylinders seemed a good idea in improving consumers’ convenience in accessing cooking gas, it got exploited by cartels, who used other brands’ cylinders to hold their own gas, filling them without licences, safety checks or any regulatory oversight. 

The illegal cylinders saw cases of leaking and exploding surge for lack of required rigorous safety checks.

The licensed brands stopped investing in new cylinders for fear it’s the cartels thieves who would benefit.

This slowed the uptake of LPG among Kenyans, with most still using wood fuel. 

Subsequently, the smoke led to increased infant mortality, putting respiratory diseases among top killers in the country.

This is why the government moved in to regulate the LPG  industry to ensure Kenyans access clean and safe energy. 

The LN100 prohibited the cylinder interchange and made every chain player accountable by law.

But Kenyans are yet to enjoy the fruits of the law as the regulator has not effectively implemented the LN100.

Dealers’ first challenge in implementing new law was the absence of accurate information or guidance from the regulator. 

Indeed, the media reported that the new regulation would not be effected until the end of 2019, yet it was already in effect from the day of gazettement. The resultant confusion was palpable.

The confusion underscored the role played by regulators to give clarity around what the law is and what law is in force.

Unfortunately in this case, the confusion emanated from the regulator. A well thought-out transition period, one aspect of which entailed gathering of circulating cylinders, was abandoned.

Illicit refilling and sale continued unabated, and a good number of Kenyans still use charcoal and firewood.

In fact, the secondary enforcement agencies suspended the move to stop the illegal filling of cylinders.

Ideally from June 25, 2019, no retailer would have been allowed to sell any other brand than the one he had an agreement with—confirmed by a letter of appointment as a brand retailer.

The police has started enforcement, but the regulator issued an unnecessary letter instructing the police to halt enforcement.

And here lies a second vital lesson on the implementation of new laws, especially those involving multiple players —the need for clear communication. 

This year, the regulator announced a further three-month extension to the LN100 implementation on the claim that only 20 per cent of retailers licences had been processed.

Yet, licensing was never a precondition for the ending of illegal refilling and interchangeability. 

The LPG licensing was given a transition period; ending interchanging but  not illegal refilling.  Another lesson here: the regulator needs to read the regulation and what it states for effective application. 

LN100 and the ensuing fiasco has highlighted the importance of a regulator who is robust in upholding both the letter and spirit of the law.

It is not appropriate to conclude the entire legislative process with an effective and repeated deferment or annulment, be it for one period or another period. The regulator does not exist to change the law, their work is to apply the law.

If everyone played their part as projected in law, Kenyans would enjoy a less chaotic industry, with easy access to safe, clean LPG. —The writer is general manager, Petroleum Institute of East Africa

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