ProGas cylinder. ProGas is owned by Proto Energy Ltd
The court has rejected a bid by Proto Energy to charge three oil firms over Sh5 billion for using its cylinders in the cylinder exchange pool programme. The cylinder exchange pool was set up by the marketers in 2012 to allow consumers to refill cooking gas cylinders from any brand that is a party to the agreement.
The maker of ProGas sought to have Lake Oil, Lake Gas and Hashi Energy barred from operating over the deal; by asking the Energy and Petroleum Regulatory Authority (EPRA) stop licensing or renewing the operating licence for the three firm.
Proto Energy lied to court that it extended credit facilities to Lake Gas to the tune of Sh87 million after transferring its cylinder deposit to the firm in August 2019. It further said that it incurred storage expenses in storing cylinders of the Lake Gas to the tune of Sh2.7 billion as of August 4, 2020. In the matter between Proto Energy and Lake Oil, the former argied that the later has taken over the filling, marketing and distribution of its gas cylinders in an attempt to skirt its debt obligations.
“That it is malicious and contrary to the exchange pools instruments of operations for the applicant to hoard their cylinders and claim storage charges, and is only meant to affect the interested parties’ LPG market,” Lake Gas and Lake Oil responded in submissions.
The tussle between Hashi and Proto is similar.
Proto claimed Hashi owes them Sh2.9 billion in unpaid storage charges and a further Sh91 million in extended credit facilities by transfer of its cylinder deposit to the interested party.
In her ruling dismissing the two cases, Justice Pauline Nyamweya said Proto Energy had failed to demonstrate an arguable case and its application was, therefore, unmerited.
The cylinder exchange pool was scrapped in 2019 after 10 years by amendments to the Energy (Liquefied Petroleum Gas) Regulations of 2009.
This came after marketers gave the scheme a wide berth, preferring to manage their value chains.