Oil marketers decry illegal gas refilling

By Macharia Kamau and Njiraini Muchira
Illegal refilling of cooking cylinders has grown and is now taking a new twist, with the culprits targeting petrol stations and stealing with cylinders, both empty and filled.

Major oil marketers say there has been a significant increase in theft of gas cylinders at retail outlets and they are pointing fingers at the authorities for a lacklustre enforcement of the regulations governing trade in cooking gas.
Growth in demand for cooking gas over the years and an eroded spending power among Kenyans has also been cited as among factors fuelling growth of the illicit industry segment.

While statistics are scanty as to how much gas is bought and sold in the black market, industry players say the segment could be accounting for as much as 30 per cent of Liquefied Petroleum Gas (LPG) that is consumed in the country.
This is in comparison to under 10 per cent market share that the illegal trade had about five years ago.
Retail outlets
National Oil Company of Kenya (NOCK) confirmed loss of hundreds of gas cylinders that have been stolen from its retail outlets this year alone, some of them lost while in transit.

“In recent months, we have reported thefts of cylinders across the country,” said Sumayya Athmani,  NOCK managing director.
“In January this year, thieves made away with 171 cylinders from the firm’s Embakasi service station. In March last year, we lost 109 cylinders when one of our LPG distribution trucks was waylaid in Molo.”
She attributed the thefts to illegal refilling. These criminals use cylinders from major marketers because they do not have capacity to import cylinders.
“We are certain the thefts are motivated by the increase in illegal refilling in the country. Illegal refilling of LPG cylinders is a major concern for the industry,” she said.
“Other than the losses that we incur due to loss of cylinders, illegally refilled cylinders do not undergo the mandatory safety checks — thus exposing consumers to all sorts of safety risks.”
LPG supply
She said the thefts had been among the factors affecting stability of LPG supply in the country noting that at times marketers have adequate LPG stocks but are unable to supply the market because of cylinder shortage.
Another chief executive who spoke on condition of anonymity blamed the Energy Regulatory Commission (ERC), saying the outfit is inept at TAMING the illegal trade in cooking gas.

“Previously, cases of theft at retail outlets involved cash but today they leave the safe and  go for cylinders,” said the executive.
“In a single week, these racketeers can hit as many stations as four outlets operated by different marketers.”
“We have reported the incidences of theft to authorities but we are yet to see any progress by the police or ERC.”
The source said ERC has not been taking its work of enforcing regulations governing trade in cooking gas seriously, noting that the regulator has been dishing out operating licences regardless of the applicant’s qualification.
This illicit segment of the industry has grown despite obvious dangers that it poses to the public who cannot verify whether a cylinder is fit for continued use.

There are also requirements that a refilling facility needs to meet.  “Effective enforcement by the regulator to curb malpractices especially illegal refilling and illegal rebranding of cylinders will give confidence to the current LPG retailers to invest in more cylinders and also encourage new entrants to invest in this segment,” said Wanjiku Manyara, general manager Petroleum Institute of East Africa, a lobby for oil marketers.

ERC Director General Kaburu Mwirichia said they have been undertaking regular raids at suspected depots.
In March, ERC carried out two raids on illegal depots Nairobi’s Industrial Area and Eldoret and arrested operators and customers buying from the premises.

It also confiscated more than 150 cylinders belonging to different marketers from these facilities.
“The commission has stepped up surveillance of such illegal activities in the country and will ensure perpetrators are dealt with according to the law. Consumers and retailers refilling from such facilities will also be prosecuted,” he said.