Business

You can now easily exchange your gas cylinder

You can now easily exchange your gas cylinder

Small and medium-sized cooking gas dealers have registered a major win in their fight to grow market share in a market controlled by multinational oil marketing companies.

The companies under the aegis of the Energy Dealers Association (EDA) can now set up a cylinder exchange pool that will allow their customers to refill cooking gas from the nearest retailer as long as they are members of the exchange.

A similar industrywide exchange pool was abolished in 2019 following concerns over the rise in illegal refilling.

The petroleum (Liquefied Petroleum Gas or LPG) Regulations of 2019 disbanded the mandatory exchange pool, requiring marketers to only handle gas cylinders that bore their brand name.

While reducing illegal refiling, the move also hurt genuine companies that did not have expansive retail outlets. The regulations, however, created provisions for companies to pool together and create voluntary exchanges but which needed the Competition Authority of Kenya’s (CAK) approval.

CAK said it has granted an exemption to the EDA members exclusively dealing in cooking gas cylinders. The association is made up of 32 members. The regulator, however, prohibited sharing of certain information among the members of the association, including pricing, which could lead to anti-competitive behaviour, such as price-fixing.

“However, sharing of all other forms of commercially sensitive information, including pricing, margins, volumes, input costs, capacity in the market, any specific information about customers, current or future product development plans, and proprietary information, including trade secrets, know-how, technological innovation and other intellectual property will be prohibited,” said CAK.

“The exemption… is granted on condition that Energy Dealers Association provide an annual report to the authority indicating the level of growth of the cylinder population of members against the minimum 10,000 annual target set by the Association...”

The previous regulations enacted in 2009 allowed LPG marketing companies to accept cylinders from customers but with a condition to return them to their owners.