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Stakeholders in the energy sector have raised concerns about the proposed Petroleum Regulations 2024, terming them punitive and likely to disrupt the industry.
Key players in the liquefied petroleum gas (LPG) industry argue that the stringent requirements will increase operational costs, subsequently driving up consumer prices.
Under the draft regulations, LPG practitioners must secure licenses for every activity, including importation, exportation, storage, refilling, distribution, retail, and installation.
The licensing framework also extends to specific professional roles such as installers, pipefitters, and technicians.
One contentious aspect is a new mandate restricting LPG refilling operations to between 6:00 a.m. and 6:00 p.m., unless explicitly authorsed by the Energy and Petroleum Regulatory Authority (EPRA).
Similarly, gas stations must adhere to specified operating hours to minimise risks, with schedules determined by EPRA's local guidelines.
Increased Costs and Compliance Burdens
Sector players argue that the cost of adhering to these new requirements, such as maintaining proper licenses and meeting safety standards, will be financially burdensome.
Non-compliance could lead to severe penalties, including business closures, fines, or even permanent license revocations for severe violations.
Additional measures include penalties for safety breaches, such as improper fire safety measures, cylinder tampering, or non-compliance with storage standards.
Businesses will also face increased obligations, such as managing a higher number of gas cylinders – rising from 30,000 to 70,000 units – a move they say will deter investment in the sector.
Industry Backlash and Economic Concerns
Stakeholders have criticised the restrictive operational hours, claiming they contradict Kenya’s ambition of becoming a 24-hour economy.
Limiting operations, they argue, will hinder supply chains and reduce service availability.
These regulations come nearly a year after a devastating gas explosion in February 2024 claimed six lives and injured over 200 people, prompting the government to tighten oversight in the energy sector.
Despite these efforts, sector players warn that the new measures could stifle growth in an already struggling economy.
The announcement coincides with President William Ruto’s recent formation of a task force to address the exodus of businesses and capital from Kenya.
Consumer Safeguards Introduced
To protect consumers, the proposed regulations require LPG suppliers to implement complaint resolution systems and offer refunds for cylinder deposits.
Refunds must align with regulatory guidelines and cannot account for wear and tear on cylinders.
As discussions around the proposed regulations unfold, energy sector stakeholders continue to call for a more balanced approach that ensures safety without imposing excessive burdens on businesses.