Nipate
Forum => Kenya Discussion => Topic started by: vooke on October 13, 2021, 12:05:02 PM
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This should be a quickwin for the next administration; set up a massive storage facility to compete with AGOL on pricing. But of course Uhunye probably has serious stakes in AGOL.
Next is to regulate prices
So deep-pocketed and well-connected is the monopoly that controls imports of liquefied petroleum gas (LPG) that no new player seeking to enter the industry gets past endless government bureaucracy, Petroleum and Mining Principal Secretary Andrew Kamau told lawmakers last month.
The sabotage by government regulatory agencies in granting the necessary approvals for setting up large-scale LPG storage facilities is so significant, he said, that he knows only one firm that has recently received an environmental impact clean bill of health from the watchdog Nema.
Mr Kamau appeared before the National Assembly’s Finance and Planning Committee to explain the sharp increase in fuel prices in the last review.
https://nation.africa/kenya/news/why-kenyans-are-paying-dearly-for-cooking-gas--3580138
An Epra report shows local LPG consumption has grown exponentially from 77,000 tonnes in 2007 to 400,000 though a large section of the population is yet to be tapped – 55.1 per cent of Kenyans use firewood for cooking.
But the government maintains that it is too soon to regulate LPG prices - as is the case with petrol, diesel and kerosene - arguing that setting price controls for the product will inhibit investment in the sector.
“The (LPG) terminal in Mombasa was opened in 2012 and it was a purely private investment. We are yet to reach a point where the government has to step in and put price controls on LPG because this will deter investors from coming into the sector,” Mr Kiptoo said.
“To start regulating LPG we would have to bring its importation into the Open Tender System (OTS) framework and build a common user facility.”
Africa Gas and Oil Ltd (AGOL) owns the Sh12.5 billion, 10,000 tonne LPG storage facility that handles more than 90 per cent of the imported LPG, with smaller players paying to use it, while the government-owned Shimanzi Oil Terminal has a 1,400-tonne capacity.
MPs wondered why the government has not built a State-owned common user storage facility for LPG, leaving consumers heaving under high cooking gas prices set by the monopoly.