A local association for liquefied petroleum gas (LPG) traders is smelling a rat in the recent decision by the government of Kenya to ban LPG imports from Tanzania, pointing an accusing finger at some influential Kenyan firms wanting to monopolise the business in that country.
“There are no good reasons to ban LPG trade between Kenya and Tanzania except for the influence of some few companies in that country wanting to monopolise the business there.
“The consequence of the ban is that some companies in Kenya operate in a monopolistic setup, contrary to fair competition practices as set by East African common market rules,” the association said in a statement issued to the media on Wednesday.
Companies from Tanzania have been exporting gas to Kenya for the past ten years and before the embargo, they used to dispatch about 40,000 metric tonnes out of 100,000 metric tonnes they import into Tanzania per annum.
Reached for comment on Wednesday, the Minister for Industry, Trade and Investment, Mr Charles Mwijage, said the decision by the Kenyan government was against the spirit of the East African Community (EAC).
“We are still engaging them (the Kenyan government) through various channels at EAC level and we have as well informed the EAC Secretariat for possible resolve of the impasse.
“It should be noted that the authorities in Nairobi not only banned LPG but wheat coming from Tanzania as well, the move has negative impacts to Tanzanian traders and people in the region,” Minister Mwijage told the ‘Daily News’ in a telephone interview.
The Tanzania LPG Association charges that local companies have invested on the basis that they will be able to do business by supplying the domestic market and also cater for export markets like Kenya as provided by the East Africa Common Market Rules.
“Now that the ban is in effect and no product is flowing from the Dar es Salaam and Tanga ports into Kenya, the impact is clear; prices in Mombasa are very high compared to those in Tanzania.
“The government of Kenya should help to remove this ban for the benefit of East African LPG companies and consumers as was intended in the establishment of East African Common Market,” the association said in the statement.
On April 24, this year, Kenya’s Principal Secretary for Energy and Petroleum, Mr Andrew Kamau, announced the ban on LPG imports from Tanzania, in a move he said was meant to eliminate illegal gas filling plants that posed safety and security risks.
“So if you want to play in this game, come and invest in Kenya or import through Mombasa and then we can now follow up who is supplying unlicensed dealers. But now this whole thing about Tanzania is a thing of the past,” Mr Kamau was quoted as saying during a briefing with oil marketing companies.
The Kenyan official claimed further that importers of LPG from Tanzania under declare quantity and value of the LPG or both resulting in loss of revenue by the government in Nairobi.
However, suppliers in Tanzania argue that since LPG imported through Mombasa Port is distributed in that country and also exported to other EAC member states by road, it was possible that illegal refilling was being conducted in Kenya.
Daily News
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