Kenya’s Energy and Petroleum Regulatory Authority (EPRA) is poised to implement a major policy change that could profoundly affect the daily lives of millions of citizens. Announced by EPRA Director Daniel Kiptoo, the plan to introduce a maximum retail price for Liquefied Petroleum Gas (LPG), commonly known as cooking gas, represents a bold step towards taming the volatile market that has long burdened consumers. This initiative is more than just a regulatory adjustment; it is a strategic effort to foster a more predictable and equitable energy landscape, ensuring that clean, modern cooking fuel remains accessible to all.
The core of EPRA’s strategy lies in establishing a new framework that will centralize the importation of LPG. By shifting to an Open Tender System (OTS), the authority aims to create a competitive environment where companies vie for contracts to import gas on a large scale. The winning bidder, having offered the lowest price, would then supply the product to other businesses and distributors across the country. This centralized buying model, which may also be extended to other petroleum products like Heavy Fuel Oil and bitumen, is expected to drive down wholesale costs, a saving that EPRA hopes will be passed directly on to the consumer through the new price caps.
The motivation behind this regulatory intervention is twofold: consumer protection and public safety. For years, Kenyans have faced erratic price fluctuations for cooking gas, making it difficult for households to budget and often forcing them to revert to less-clean and more harmful alternatives like charcoal. By setting a ceiling on retail prices, EPRA intends to provide much-needed price stability and predictability. Furthermore, the plan includes a strong focus on security. The authority intends to crack down on illegal gas businesses by revoking their permits and implementing a sophisticated tracking system for gas cylinders. Similar to a barcode system already in use by some companies, this initiative aims to create a robust chain of custody, making it harder for counterfeit or illegally refilled cylinders to enter the market, thereby reducing the risk of accidents.
While the plan holds great promise, its success hinges on careful execution and industry cooperation. The implementation of the OTS requires delicate negotiations with major Oil Marketing Companies to ensure a smooth transition without supply disruptions. The new system's effectiveness will also be a test of how well centralized importation can meet the diverse and dynamic needs of a national market.
