LPG crisis looms as dealers, national regulator tussle over new licensing law
Liquefied Petroleum Gas (LPG) dealers and the national regulatory agency are headed for a showdown over the implementation of regulations relating to LPG cylinder pool exchange, a move which could plunge into crisis users of the commodity.
This comes after the Energy and Petroleum Regulatory Authority (EPRA) rebuffed a request by the union of the dealers – Energy Dealers Association – to have the implementation period of the laws set to come into effect this month extended by another six months.
The implementation of the Legal Notice No 100 of 2019, which was to take effect on June 25, 2019 before a three months extension was granted by EPRA, has proved to be a bone of contention between the two entities.
The new law – Petroleum Act 2019 – requires all LPG retailers, wholesalers and transporters to hold licenses for each business location following the abolishing of the compulsory LPG cylinder exchange pool.
It also says the licenses will be specific to the authorised cylinder brands, and retailers are required to obtain prior written consent from brand owners.
On December 23, 2019, EDA – which controls about 55 percent of the retail market with more than 30 LPG brands across the country – through its General Secretary Kepher Odongo called for the law to be delayed to June.
Mr Odongo said the implementation of the Legal Notice No 100 of 2019 starting January will not be plausible as not all retailers have been issued with relevant licenses from EPRA and effect of the deadline for implementation of the legal notice shall be closure of the retailer’s shops and/or business.
He added that most retailers are also yet to obtain the various county licenses and permits as it was not economically sensible to take out the fire certificates towards the end of the year with the New Year just around the corner.
ISSUANCE OF LICENSE
“We are currently but urgently requesting for an extension of the transition period for a further six months. Upon extension, we shall be appealing to your good office to speed up the process of issuance of licenses to the retailers.
“We also pray that you consider the communication between ourselves and the competition authority on the process of adoption of our mutual exchange agreement,” added Mr Odongo in a letter dated December 23, 2019.
Mr Odongo accused EPRA of double standards claiming that multinational petrol stations dealing in LPG are allowed to operate without the said licenses.
“Why kill the businesses of common mwananchi at the expense of foreign companies? You cannot subject traders to get documents from other government agencies and then sit on them for 30 days. On this, we shall go everywhere including parliament, court of law and even hold countrywide demonstrations,” he warned.
But EPRA Director General Mr Pavel Oimeke, in a replying letter dated December 31, 2019, hit back at the dealers maintaining they will be no more extension to the transition period directing members of the Association to comply with the provisions of the legal notice as gazetted.
Mr Oimeke said the regulations had provided six months transition period that ended on December 31, 2019.
“The Authority further wishes to draw to your attention to Section 73 of the Petroleum Act, 2019 that requires processing of applications for Petroleum Business Licenses within 30 days of receipt of the applications.
“The Authority notes that all application for licenses for retail of LPG in cylinders that have been received since the coming in force of the regulations have been processed within the aforementioned timelines,” added the letter addressed to Mr Odongo.