This archive report was first published on 14 September 2021.
September 14, 2021, marked a significant milestone for small and medium-sized cooking gas dealers in Kenya as they secured a major victory in their fight to grow market share in a market controlled by multinational oil marketing companies.
The Energy Dealers Association (EDA), comprising 32 members, has been granted an exemption by the Competition Authority of Kenya (CAK) to set up a cylinder exchange pool, allowing their customers to refill cooking gas from the nearest retailer as long as they are members of the exchange.
This move comes after the petroleum (Liquefied Petroleum Gas or LPG) Regulations of 2019 disbanded the mandatory exchange pool, requiring marketers to only handle gas cylinders bearing their brand name. While this reduced illegal refilling, it also hurt genuine companies without expansive retail outlets.
CAK has, however, prohibited the sharing of certain information among EDA members, including pricing, to prevent anti-competitive behavior 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 granted to EDA members is conditional upon the association providing 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.
Previously, the 2009 regulations allowed LPG marketing companies to accept cylinders from customers but with a condition to return them to their owners.
