Proposed Petroleum Regulations Threaten Higher Cooking Gas Prices in Kenya

Stakeholders in Kenya's Liquified Petroleum Gas (LPG) sector are expressing alarm over potential price increases as the government pushes for a regulatory overhaul aimed at enhancing industry standards and safety.

The proposed Petroleum Regulations 2024 require LPG operators to obtain separate licenses for activities such as importation, exportation, storage, refilling, distribution, and installation. Currently, many dealers work under a single comprehensive license. Industry representatives warn that the new requirements will elevate operating costs, which will likely translate into higher prices for consumers, particularly affecting household cooking gas.

To provide context, the current costs for refilling gas cylinders stand at Sh1,000 for a 6 kg cylinder and Ksh3,500 for a 13 kg cylinder. This regulatory shift also introduces additional requirements that could further impact operations. Under the new framework, LPG refilling stations would be confined to operating between 6 am and 6 pm unless special permission is granted by the Energy and Petroleum Regulatory Authority (EPRA).

Autogas stations will also have to follow local EPRA mandates aimed at risk mitigation, and all LPG businesses must adopt comprehensive safety measures, which include emergency response protocols and the installation of fire extinguishers. Energy Cabinet Secretary Opiyo Wandayi voices the importance of these regulations, highlighting public safety and the need for regulatory compliance following a series of gas explosions that have caused significant casualties.

A notable incident occurred on February 2, 2024, when an explosion at a gas-filling company near Kabansora in Nairobi resulted in over 165 injuries and more than two fatalities. While the government's intention to improve safety measures is clear, critics from within the industry are labeling these new regulations as punitive.

They caution that the financial burdens imposed by compliance will ultimately be passed on to consumers, which contradicts previous government assurances aimed at reducing LPG prices to promote wider household use. As the proposed regulations progress through the legislative process, the LPG sector finds itself at a crossroads.

The implementation of these rules has the potential to reshape the industry landscape, striving for a balance between enhanced safety and economic viability. The coming months will be pivotal in determining whether the government's approach will successfully fulfill its dual goals of ensuring safety while maintaining affordability for millions of Kenyan households.