Traders arrange cooking gas cylinders at a depot in Nyeri Town. Sweeping changes in the LPG industry have helped lock out illegal dealers, but also tightened supply. [File, Standard]
The Government’s decision to block the entry of Liquefied Petroleum Gas (LPG) through the Namanga border point has weeded out unscrupulous suppliers, leading to tight supply and higher prices.
The latest Petroleum Products Consumption Report covering three months to March shows consumption of cooking gas grew by just two per cent to 17,393 metric tonnes, as more consumers fell back on kerosene.
The pace is slow compared to last year when in the nine months to September, consumption rose by 33 per cent as consumers warmed up to the decision by the Government to zero-rate the commodity.
During the quarter under review, average LPG price was Sh2,112 for a 13kg cylinder, but this has since jumped to Sh2,277.48, according to Kenya National Bureau of Statistics end of May data.
Speaking to The Standard yesterday, Petroleum Institute of East Africa (PIEA) Chairman Powell Maimba said the decision by the Government to close other border outlets had caused shortage in the market.
“The directive by Government that marketers cannot bring in gas through any other border apart from Mombasa meant that businesses had to restructure to see how to get products through Mombasa only,” he said.
Mr Maimba told The Standard on phone the decision also meant small distributors as well as illegal re-fillers who depended on borders like Namanga had to close shop.
The decision was taken to weed out traders who were evading import taxes and, therefore, pricing the commodity cheaply.
“Quality checks were also not being observed and such players could easily sneak in substandard LPG,” said Mr Maimba.
“Only Mombasa Port offers quality checks on LPG.”
He explained that the section of the market, which was benefiting from illegally refilled gas cylinders, had been affected and had, therefore, to fall back to using kerosene, whose consumption jumped by nine per cent to 142,646 cubic metres during the period under review.
Some vessels loaded with LPG could bypass Mombasa and discharge their cargo in Tanzania ports from where it was loaded to tracks and sneaked into Kenya via Namanga.