Authority needs to reign in rogue gas firms

The recent move by the government to outlaw the gas cylinder pooling system by manufacturers is commendable as it will restore sanity in an industry prone to unethical practices including illegal refilling, rebranding and counterfeiting of gas cylinders. It is not lost on observers that the pooling system denied the brands an opportunity to monitor their cylinders, as faceless refillers sold them with no regard to safety.

BEST PRACTICES

Thanks to the new law, Liquefied Petroleum Gas (LPG) brands are now in a better position to guarantee the safety of every cylinder. This is because the brands, other than only swapping their cylinders for new ones through their own branded retail points, are now compelled to add safety instructions onto each cylinder, including guides on what to do if consumers suspect a gas leak. It is also worth noting that the new law is part of the government’s strategy to position LPG as Kenya’s primary cooking fuel to end the health and environmental hazards posed by cooking using firewood and charcoal.

Although the law has good intentions, its effective implementation will require strict adherence to the LPG global industry best practices. According to the Dublin-based World LPG Association—that brings together the broad interests of the vast industry — best practice is driven by the issue of “metal management”, a term describing the multi-functions of purchasing, supplying, maintaining and controlling cylinders and other containers used to store and transport LPG.

CUSTOMER SAFETY

In its Guidelines for Good Business Practices in the LPG Industry, the World LPG Association says distribution, of cylinders in particular, is unique in the energy industry. LPG is one of the very few common consumer products sold in a metal or composite plastic container that is often more costly than the product it contains. In the distribution system, many parties may physically handle the cylinder before it reaches the customer. Once the cylinder of LPG has been sold, the seller (who is frequently the cylinder owner) has no direct control over its subsequent use. This makes the importance of maintaining the cylinder or container integrity throughout the distribution chain an essential part of customer safety.

Once the cylinder leaves the direct control of the owner, there is no guarantee as to when or if it will be returned. Yet, the owner is exposed to the risk that misuse of the cylinder could result in injury, loss or damage to property, and loss of customer business.

“Accidents caused by circumstances or people beyond the control of the owner can expose the owner to severe liability claims, damage the reputation of the owner, damage to the company’s brand, and damage to the overall reputation of the industry”, the Association says.

SERIOUS INJURY

But elimination of these bad practices within the market framework is a clear role between the government and the industry.

Whereas the industry works to provide a sustainable modern energy supply, government should be aware of, and work to rectify, some of the more egregious practices of unscrupulous operators including poorly designed and constructed LPG storage facilities. Poorly designed plants and other facilities can result in unfair competition due to lower capital outlay by unscrupulous operators, and greater risk to employees, customers and the public.

One of the more destructive practices is illegal filling (decanting) of cylinders by someone other than the cylinder owner.

This dangerous practice can result in: no control over the condition of the cylinder; no control over the quality or quantity of the product in the cylinder; serious risk of damage or injury to those handling including the customer and inequitable and often unsustainable competition.

Sadly, in Kenya, both the government and the Energy Dealers Association (EDA) continue to abet this illegal practice.

ILLEGALLY REFILLED

Though the 24-member association is expected to comply with the Kenya Bureau of Standards (Kebs) safety regulations, illegally refilled gas cylinders still find their way to Kenyan homes.

Even more intriguing is the fact that EDA represents 70 per cent of all gas sold in the country but owns only 10 per cent of the total cylinder population.

On its part, the Energy and Petroleum Regulatory Authority (EPRA) keeps looking the other way as illegal refilling continues unabated. In effect, the regulator has become the epitome of impunity as more and more Kenyans live in the shadow of death that could arise from illegally refilled cylinders.

A cursory glance at the amount of gas the EDA members buy compared with the number of cylinders they have in the market shows that it is impossible for them to move these volumes through their collective association without illegally filling other brands.

Some of the players are  illegal cross fillers who created a group to give themselves the resemblance of legitimacy. The upshot is that EPRA needs to reign in rogue associations, if sanity is to be restored in the industry.

The writer is a communications consultant who follows the hydrocarbons sector.