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Pool gas cylinder arrangement faces demise

LPG GAS CYLINDERYou will soon find it hard to replace your empty gas cylinder with another of a different brand after the Energy ministry expressed intent to dismantle the pool system introduced in 2009.
According to draft regulations published in the Kenya Gazette on Friday, the Liquefied Petroleum Gas (LPG) Cylinder Exchange Pool will be dissolved when the rules take effect.
The pool had made it possible for gas users to get a cylinder from any marketer once theirs was exhausted, which eliminated the hassle of having to move around looking for gas from a specific company.
The collecting marketer would then take the cylinder to the concerned marketer and had to pay a fee to the owner of the original cylinder to cover for the container’s deposit fee.
RECORDS
That system was established through subsidiary legislation issued in 2009 by then Energy minister Kiraitu Murungi.
Through that regulation, cooking gas companies had to join the pool by default, and they had a committee to govern their relations.
But the new proposed rules, gazetted by Energy Cabinet Secretary Charles Keter, say marketers can only enter into agreements for distribution of cylinders if they want to.
To ensure the process is a success, the ministry will allow the pool system to run for six months from the time the laws come into effect.
“During the prescribed period, the pool shall reconcile all cylinder exchange records and issue final invoices and debt status for each brand owner within four calendar months,” the rules say.
REVIEW
Henceforth, dealing with another brand’s cylinders will be an offence.
“LPG cylinder brand owners may enter into a mutual LPG exchange agreement to enhance their access to the LPG cylinder market,” the proposed laws say.
"Parties to the any such mutual LPG cylinder exchange agreements shall consist of only licensed LPG cylinder brand owners trading in standard capacity cylinders,” they add.
“Provided there exists no hospitality arrangement, no brand owner shall be allowed to store or keep a competitor’s cylinder, whether filled or empty, in their premises other than in designated cylinder exchange points,” the rules add.
The pool system has had hiccups since it was formed.
In February, Energy Regulatory Commission (ERC) director-general Pavel Oimeke said there was a review of the system.
DEPOSIT FEE
By then, gas companies owed each other more than Sh500 million through the exchange pool.
Smaller players have especially been singled out for delaying in paying cylinder deposit fee to marketers whose cylinders they replace.
In the proposed laws, there is a clause to address the payment debacle.
“All debts incurred due to the Cylinder Exchange Pool as at the date of these regulations coming into force shall remain civil debts and shall be liable for payment by the debtors where no physical cylinder is available for exchange,” it says.
Also, no distributor’s licence shall be renewed without evidence of clearing all debts it faces.
BRAND NAMES
The new regulations are also more elaborate than the 2009 ones that they will replace once they take effect.
They ban the distribution of any cylinders that have no brand names and order all firms to print on their cylinders a notice on how to safely use, store and handle the container.
The rules also compel owners of LPG brands to report and investigate all accidents involving their cylinders.
The say the ERC should be notified of any gas-related mishap “immediately and in any case not more than 48 hours after the occurrence of such an accident or incident”.
SAFETY
Kenyans who own gas cylinders have also been given a right to get full deposit from the brand owners once they return the containers.
“To access the full cylinder deposit, a consumer will be required to surrender an empty LPG cylinder to the brand owner’s premises or distribution point,” the rules say.
As a safety measure, it will be illegal for a marketer to give out a cylinder without a seal.
Refilling directly from an LPG-ferrying vehicle has also been prohibited. The gazette notice says the rules are now up for input from the public.

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