Perhaps you didn’t even know that RURA passed a revised regulation for Liquefied Petroleum Gas (LPG) which is mostly used for cooking? Or perhaps you had an idea about this regulation in the first place?
Amidst government’s deliberate move to encourage Rwandans to switch to using gas for cooking and avoid charcoal among other biomass fuels which put a strain on trees and forest cover. RURA adopted LPG regulations in 2012 and granted LPG business Licenses and Installation Licenses of LPG plants.
The move was among other things, intended to increase LPG supply in the country; protect consumers from inflated accessories and risky cylinders among other components of LPG market chain.
During the past six years, according to Eng. Gerard Rusine, Director of Gas and Downstream Petroleum at RURA, the regulator encountered a number of challenges. The regulator expressed its concern on the need to revise the regulations after encountering gaps and challenges during the first years of implementation and subsequently took the initiative of drafting and proposing to stakeholders the draft revised regulations on LPG business.
Here are the 7 reasons why the new regulation was passed and what it means for the LPG business in Rwanda;
1 Shortage of cylinders on the market
There has been shortage of cylinders on the market due to distributors who keep cylinders in their warehouses, hence create a shortage on the market and increase LPG prices through hoarding and subsequent speculations. The new regulation will, therefore, facilitate the evaluation and identification of LPG cylinders in the country through registration and re-validation of LPG cylinders. This will help the regulators to know the amount of cylinders in the country and monitor the supply chain to avoid speculations and any other implications that would follow.
2 Missing provisions in the existing regulations on enforcement mechanisms for non-compliance
According to RURA the LPG regulations adopted in 2012 were dysfunctional because of some key missing provisions on enforcement mechanisms for non-compliance.
Rusine says that the previous regulation was hurriedly enacted without market projections and it has made it difficult for the regulators to follow LPG dealers who default to comply with relevant laws, regulations and standards such as illegal filling of cylinders. The revised regulation extensively looked into the activities of the supply chain and specific licensing regime, faults and administrative sanctions.
3 Monitoring mechanisms though specific licensing regime:
The above amendments in regulation will trigger efficient monitoring and tracking process of each activity implemented in the supply chain and enforce each provision in respect to standard compliance. This will also boost safely LPG penetration in the country. It will also allow government institutions keep accurate record of the industry in order to establish better strategies for the LPG sub-sector.
4 Safety in LPG business
Due to missing LPG cylinders manufacturing industry and institutions to revalidate (testing process) in Rwanda, there have been fears that the usage of LPG is not as safe. Some existing cylinders have more than 5, 10 or 20 years of usage in the market and some would go more than specified time without revalidation. The new regulation will also seek to close that gap and ensure safety of consumers in that respect.
The new LPG regulation will also address missing safety guidelines in the existing regulations for different operators’ activities (Importers, transporters and distributors, LPG plants, storage, wholesalers and retailers) such as required safety distances from LPG Plant to the neighbouring infrastructures among others.
5 Lack of strategic stocks
Recent market survey by the regulators revealed that even as the government seeks to increase the usage of LPG, there is lack of proper stock in case of serious shortages in the country. The new regulations will, among other things require suppliers to consider having reserve stock for use during the time of crisis. The revised law will set specific requirements for Installation of bulk storage tanks, parking yards and LPG filling plant.
6 Illegal filling of cylinders
Studies have revealed that some current operators of LPG in the country have a habit of filling gas cylinders owned by other operators while some do not have standard measurements. The new LPG regulation brings in new provisions to punish operators who will be involved in Illegal filling of the gas cylinders.
7 Increase awareness
According to RURA, LPG penetration is still as low as about 10 per cent in Kigali and not more than 4 per cent outside the capital in secondary cities. RURA has also established that there’s insufficient awareness among the population on the benefit of LPG as a clean-burning, sustainable, efficient fuel and a vital source of energy for cooking purposes hence the low penetrations. The revised regulations will seek to increase LPG awareness through licensed operators to the potential users. common people.