The Energy and Petroleum Regulatory Authority (EPRA) has revoked interchange of Liquefied Petroleum Gas (LPG) cylinders among different brands.
EPRA, in association with the Petroleum Institute of East Africa (PIEA), on Tuesday reversed the interchange system that came into effect in 2010, in order to ensure safety measures are followed when refilling gas cylinders.
Speaking during the unveiling of the new LPG regulations in Nairobi, EPRA Director General Pavel Oimeke said that the ban will restore safety to the LPG market hence protecting brand owners by cutting down opportunities for illegal refilling, illegal re-branding and counterfeiting of gas cylinders.
“The mandatory interchange of LPG cylinders has seen brands lose track of 90% of the cylinders they had invested in, stalling investment in further cylinders, and seeing legal checks set aside as nameless re-fillers resold cylinders but could not be made accountable for safety breaches,” Oimeke said.
Oimeke added that LPG brands will now be responsible for guaranteeing the safety of every cylinder by only ensuring swapping of cylinders for the new ones through their branded retail points.
The brands must also add safety instructions onto cylinders, including guides on what to do if consumers smell a gas leak.
PIEA Chairman Olagoke Aluko said the move would solve brand losses experienced in the past with two out of 50 licensed brand owners undergoing a loss of approximately Ksh 1.2 billion in cash and assets.
“Often one brand owner would end up with an excess of competitors’ empty cylinders, so they couldn’t just swap cylinder for cylinder. The competitors needed to pay them back the deposits on the excess cylinders. With time the refundable cylinder deposit owed among the 50 LPG exchange pool members increased astronomically leading to the collapse of two brands that didn’t honour the refunds and an unpaid debt of approximately Sh 1.2 billion in cash and assets,” he said.
Aluko further noted that the move would also solve the problem of cylinders not getting back to the brand owners after circulation during the interchange which resulted into brand owners suing other brand owners, discouraging marketers from investing more in the LPG sector.
“There has been rising court cases where brands were sued for safety failures on cylinders with their brands on them despite them not having seen those cylinders for many years due to movement and also illegal refilling market,” he added.
The new regulations once gazetted, will ensure additional control in LPG cylinders, increase LPG infrastructure, and ensure ownership and maintenance of cylinders by cylinder owners and affordability and easier consumption of LPG.