Uniform gas cylinders remain a distant dream despite consumers’ complaints

Saturday August 3 2013

An attendant checks out gas cylinders at a gas station. There is a shortage of cooking gas in the country.

An attendant checks out gas cylinders at a gas station. There is a shortage of cooking gas in the country.  

By Angela Nampewo

Kampala

One of out of every 100 sounds like a negligible fraction until it is applied to 34 million Ugandans. Divide that by five, the estimated size of the average urban Ugandan household and 68,000 households do not seem so many.

Yet when a fifth of them run out of cooking gas and cannot find it anywhere, the figures begin to make sense. The shortage of liquefied petroleum gas has the potential to cause a lot of grief for thousands of Ugandan households.

Liquefied petroleum gas (LPG), also known as cooking gas, is a mixture of propane and butane gases produced from the process of natural gas oil extraction and oil refining. According to the energy balance of Uganda as reported by the Ministry of Energy and Mineral Development this year, biomass, that is firewood and charcoal, contributes 88 per cent of total energy consumed in Uganda while liquefied petroleum gas contributes less than two per cent.

In spite of the comparatively small numbers involved, the scarcity of cooking gas has a marked impact on the Ugandan consumer; not least because of the differentiation in the design of gas cylinders, which confines a consumer to a particular supplier preventing them from buying the available stocks of a different company during a period of scarcity.

Standardisation
“There is a branding aspect that informs that aspect. When it comes to standards, there are a number of drivers. The consumer drives standardisation. The second driver for standardisation is research and technology.

There is an association for liquefied petroleum gas. They have been driving the process for standardisation,” says Mr Ben Manyindo, the Uganda National Bureau of Standards (UNBS) executive director. He added that consumers drive the standards when they get inconvenienced and raise complaints. The consumer voice usually comes in when there is scarcity of gas.

One of the standards that UNBS is working on relates to the safety of gas cylinders, especially in relation to the cylinder valve. There is one aspect though that will not be addressed by the emerging standards and that is the standardisation of the valve to make gas cylinders uniform in order for a consumer to buy gas from any provider. “That is one thing we have not agreed on but in other countries, they (cylinders) are the same,” says Mr Richard Ebong, the head of engineering standards division at UNBS.

In Chapter 13, Article 81 of the East African Community Treaty, the partner states recognise the significance of standardisation, quality assurance, metrology and testing of products towards reducing unnecessary variety of products and facilitating interchangeability of products.

Standardising gas cylinders allows consumers to use cylinders interchangeably without having to replace the cylinder valves or purchasing a new cylinder before buying gas from a different company.
Kenya is the only country in the region that has developed comprehensive standards on liquefied petroleum gas in line with the East African Community requirements.

“In Uganda, if you have to change to another gas supplier, you must buy a new cylinder nozzle. This involves a switching cost,” says Mr Sam Kuloba Watasa, the executive director of the Uganda Consumers’ Protection Association.

A switching cost is the monetary equivalent of what you have to forego to switch to another supplier. According to Mr Watasa, if you standardise the nozzle or valve on the gas cylinder, you have removed the switching cost so that the consumer can easily switch to another supplier.

While standardising gas cylinder valves would ease consumer choice, the Ugandan regulatory bodies on the one hand and the gas supply companies on the other, are not in a hurry to adopt standardisation of gas cylinder valves.

“There are concerns that have come up from consumers. The main driver for standardisation of gas cylinder valves is scarcity,” says the Rev Frank Tukwasibwe, the petroleum supply department commissioner in the Ministry of Energy and Mineral Development, the regulator for petroleum product supply.

According to the Rev Tukwasibwe, the policy direction is looking at having standard gas cylinder valves. “However, standardisation has its challenges. It could lead to the setup of illegal refilling plants. There are also very many old cylinders which should be removed from the market, otherwise they become a safety problem,” he says.

“When cylinders are returned for refilling, the onus is on the filling company to test cylinders before returning them to the market. When you standardise, who will own up to the cost of ensuring that cylinders are refurbished? Cylinders are supposed to be certified every five years. When you have standardisation, who will do it?” the Rev Tukwasibwe asks.

From the regulator’s perspective, standardisation is also a disincentive to investment. When a company is licensed, it can come in with a few cylinders and then take up another company’s cylinders which it then uses to beat the competition. Also if there is a problem of fire, a company cannot own up under standardisation.

“Our approach is that we can unlock the supply chain to ensure that gas is available. We are doing everything possible to ensure that they (consumers) are not disappointed when they go to the supplier,” says the Rev Tukwasibwe.

Shell, which sells over 25 tonnes of gas daily, is not keen on standardisation of gas cylinder valves and with reason. “It is not something we would encourage. Who repairs cylinders? A cylinder can be a dangerous piece of equipment. It would put consumers at risk for buying cylinders that have not been certified. If my company cylinder causes problems, I’m liable,” says Mr Ivan Kyayonka, Shell’s country chairperson. “There is a cost implication. The valves differ (amongst gas companies). Standardising gas cylinders means buying new valves and recalling all the old cylinders not only to change their valves but also to carry out validation. We don’t have experts within the country to do validation,” says Mr Hassan Nyenje, the commercial manager at Kobil.

Validation is the process of removing air from the cylinders to create a vacuum. Kobil sells 100 tonnes of gas a month in 6kg, 12kg, 25kg, and 35kg cylinders through retail outlets at the company’s 43 service stations. On average, each service station sells about 3,250kgs of gas a month and according to Mr Nyenje, there are about 4,000-6,000 cylinders in the hands of Kobil consumers.

“I think we have less than 150,000 cylinders in the market. If we go by 34 million (as Uganda’s population) then it means only 0.01 per cent of the population are using gas. The current numbers are driven by supply,” says Dr Emmy Basirwa, the chairperson of the Uganda Liquefied Petroleum Gas Association and proprietor of Wana Solutions, the only Ugandan-owned gas supplier out of the 13 in the market.

According to Dr Basirwa, standardisation of gas cylinder valves is not something that should come up for discussion until a strong institution is in place to manage the transition. The road to standardisation is still a minefield littered with problems of going uniform. At the moment, not even the persistent consumer cries are enough to convince the dissenting voices.

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