Omtatah files case challenging new law on exchange of gas cylinders
- The new laws ban oil marketers from accepting gas cylinders from rival brands during refills and are meant to safety by minimising opportunities for illegal refilling, illegal rebranding, and counterfeiting of gas cylinders.
- Omtatah argues that the ban on the cross-refilling of cylinders has the objective of ring-fencing markets so that the brand owners can obtain an undue competitive advantage by locking out local small-scale dealers, and that must also be taken into consideration in interpreting the rules relating to the exhaustion of the brand owners' right to own the cylinder after sales.
Activist Okiya Omtatah has moved to court to challenge the new Petroleum (Liquefied Petroleum Gas) Regulation, 2019 saying that it is unconstitutional.
The new law bans oil marketers from accepting gas cylinders from rival brands during refills and are meant to minimize opportunities for illegal refilling, illegal rebranding, and counterfeiting of gas cylinders.
In his petition, Omtatah claims that the regulations are discriminatory against both the consumer and independent refillers whose activities have helped make the Kenyan LPG market very competitive.
“The claim that the impugned restrictions on refilling are meant to reign-in rogue gas re-fillers does not hold water as the respondents have law enforcement to help them with their work. There are alternative ways of addressing the concerns without punishing innocent consumers and independent re-fillers. Registered and equipped to refill LPG in cylinders irrespective of the brand,” reads court papers.
He argues that the ban on the cross-refilling of cylinders has the objective of ring-fencing markets so that the brand owners can obtain an undue competitive advantage by locking out local small-scale dealers.
This he argued must also be taken into consideration in interpreting the rules relating to the exhaustion of the brand owners’ right to own the cylinders after sales.
“It is unacceptable to enforce any law which has not been published in the Kenya Gazette. Before publication in the gazette, the instrument lacks the endorsement of the Government Printer, who is the official publisher of the Government, and guarantees the imprimaturs of all the publications the facility publishes,” says Omtatah.
He submitted that he conducted some research and is aggrieved that on average, the lowest amounts charged by LPG brand owners as cylinder deposits is Ksh.2,600 for a 6 kg cylinder and Ksh.4,200 for a 13kg cylinder, which he says is above the market price of imported brand new empty cylinders.
“The Petitioner is also aggrieved that regulations 14 (a), (b)(i), & (k) and 19 (4) of the new regulations forbids the refilling of a gas cylinder by a person or entity other than the brand owner or refilling of a cylinder without the prior written consent from the brand owner,”says Omtatah.
He now wants the court to quash the new regulations saying that the consumer acquires ownership of the cylinder at the time of the first purchase, hence, the brand owner’s right to own the cylinder is exhausted.
Consequently, Omtatah claims that the consumer is entitled to use that cylinder, which is indeed specifically intended to be filled with gas, freely for refills.
“The ownership rights conferred on the brand owner cannot be extended to the point that the purchaser of a product bearing that brand is prevented from using that product for the purposes for which it has been placed on the market – to handle LPG,” he argues.
He argues that it is of little importance, in that regard, whether the consumer has the cylinder which he or she has purchased refilled by the brand owner or by exchanging an empty cylinder for a similar full cylinder at any other licenced dealers of LPG.
“Given that, in both of those cases, it is clear to purchasers that, first, the cylinders being refilled are second-hand goods and, secondly, the gas inside the cylinder is not branded,” says Omtatah.
The abolished LPG Cylinder Exchange Pool was created in 2009 to enable consumers to trade their empty gas cylinders at any outlet without regard to the brand of their cylinder.
The cylinder exchange pool under the repealed regulations increased access to cooking gas because of the ease with which they allowed consumers to exchange their empty cylinders without being tied to brand owners.
Under the new regulations, it is no longer mandatory for Liquefied Petroleum Gas retailers to swap any brand of cylinder, unless it is through a voluntary system as provided in the new regulations. The brands will only swap their refilled branded cylinders for empty ones through their own branded retail points.
Kenyans will now not be able to exchange their empty cylinders for refilled ones of different brands at their local dealerships.
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