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Government moves to combat Illicit Trade in the Petroleum Sector

Mr. Solomon Osundwa, Vice Chairman Petroleum Institute of East Africa and Chief Operating Officer Hass Petroleum Group during the state of the Petroleum and oil industry briefing at Serena Hotel, Nairobi today.

By Benard Mulwa
It usually goes unsaid but access to reliable, quality petroleum products is deeply intertwined with national security as it influences security operations both in terms of fuel for vehicles and aircrafts as well as power for police stations and communication systems, especially in far flung and hard to reach areas not yet connected to the national grid.
The Vice Chairman Petroleum Institute of East Africa Mr. Solomon Osundwa, observed that energy infrastructure, such as petroleum pipelines and storage facilities are critical and protecting these assets from natural disasters, terrorist and cyber-attacks, or sabotage is vital for overall national safety and security.
The petroleum industry growth in Kenya, which has seen an increase in the number of outlets, storage and refilling facilities, has brought with it numerous challenges with the biggest one being the unauthorized refilling sites of petroleum products, specifically Liquified Petroleum Gas (LPG).
These sites normally refill cylinders belonging to licensed brand owners illegally with a case and point being the fire tragedy that occurred in the residential area of Mradi Area, Embakasi that claimed people’s lives and left scores injured.
The inability to trace the movement of petroleum products comes at a close second which presents serious safety concerns to consumers and the public at large.
Mr. Solomon Osundwa said “Illegal petroleum facilities, dumping of export petroleum products, adulteration of petroleum products, and siphoning of petroleum products along our major highways and transport corridors are likewise, emerging threats from sector cartels”.
The petroleum sector continues to harbor rogue business people while some elements within our law and enforcement agencies have been compromised thus the need to enhance intelligence-led enforcement, harden prosecution measures, and capacity building across enforcement agencies.
During the celebrations for the International Women’s Day held on 2nd March 2023, His Excellency the President conveyed his concerns about rogue business people dealing in Liquefied Petroleum Gas (LPG) and other petroleum products. Equally, the
President ordered that government officials involved in granting licenses to unauthorized refilling plants to be dismissed, arrested and prosecuted.
On 28th March 2023, the Ministry of Interior and National Administration together with the Ministry of Energy and Petroleum in liaison with the Energy and Petroleum Regulatory Authority, the Energy Police Unit, and the Directorate of Criminal Investigations, embarked on a Rapid Result Initiative (RRI) on rogue LPG dealers and petroleum businesses.
The RRI aimed to ensure compliance with licensing conditions at LPG and petroleum storage and filling plants and enforce safety measures to minimize the risk of accidents.
Correspondingly, a nationwide registration of all LPG and petroleum businesses was conducted to enhance management and regulation, his speech reads in part.
Mr. Solomon Osundwa, Vice Chairman Petroleum Institute of East Africa said, “As a result, a total of 17,958 LPG and 6,188 petroleum facilities were registered, with the Central region having the highest number. This was followed by Rift Valley, Eastern, Nyanza, Nairobi, Coast, Western and North Eastern regions respectively”.
Facilities operating without valid storage and filling licenses, usage of vehicles without permits to transport bulk petroleum products, refilling of LPG cylinders of other brands without authorization from the brand owners and tampering with EPRA seals were the most common illegalities found and files forwarded to the Office of the Director of Public Prosecutions.
From the exercise it was indeed clear that new measures to curb the illicit trade of petroleum products need to be established and I would like to summarize them as follows.
First, we need to deploy advanced technology for monitoring and surveillance of the supply chain to help in early detection of illicit activities. Rogue business people are ever changing their tactics and now leveraging on technology to extend their territorial reach.
We should not be left behind. I urge the petroleum sector to take advantage of our National Government Administrative Officers as coordinators of regular inspections and surveillance exercises at the County levels owing to their reach.
Second, there is need to update and strengthen legal frameworks to impose stricter penalties on those involved in the illicit trade including government officials found to have approved illegal facilities or turned a blind eye through corruption to unlicenced facilities and vehicles transporting petroleum products without valid permits.
Third, educating the public about the dangers of using illegally sourced LPG and petroleum products can help reduce demand for such products. Sponsorships from entities such as the Petroleum Institute of East Africa in conjunction with Enforcement Agencies and other public and private entities can amplify these efforts.
Fourth, training law enforcement and regulatory personnel on the latest techniques for detecting and preventing the illicit trade as well as involving the petroleum industry players in developing solutions and reporting suspicious activities can lead to a more comprehensive approach to tackling the issue.
A dedicated Energy Police Unit was already established to provide security to critical petroleum infrastructure and a review can be made to expand the Unit to co-opt all other enforcement.
The fight against the illicit trade in the petroleum sector requires a multi-faceted approach involving collaboration between government agencies, industry players, the private sector, and the public.

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