For the better part of Wednesday morning, angry netizens took to social media to decry the current monopoly in the Kenyan Liquefied Petroleum Gas (LPG) sector.
Through the hashtag #EndGasMonopoly Kenyans on Twitter (KOT) demanded that action be taken on certain players in the sector for their uncompetitive business practices — with special light shed on ProGas owner and Mombasa millionaire Mohammed Jaffer.
Just days ago, the city tycoon and Former Prime Minister Raila Odinga’s close ally was mentioned in several local Kenyan blogs over his involvement in the death of Kenya’s subsidiary gas project ‘Gas Yetu’.
According to one blog, this whole controversy started with a contract awarded by the Petroleum Ministry and the National Oil Corporation of Kenya (NOCK) to a consortium led by Allied East Africa Ltd.
Having gotten the tender, but with no capacity to deliver, the consortium turned to Mohammed Jaffer owner of Africa Gas and Oil (AGOL) which also owns Proto Energy Limited under which Pro Gas is sold.
The company was then just beginning and was virtually unknown in the country. Jaffer had however managed to obtain a lease for use of a cylinder pressing machine from KPA in a shady deal that seems to have been orchestrated by officials from the Energy Ministry.
The fraudulent suppliers, in the first batch, delivered faulty cylinders raising questions about quality assurance and monitoring of the manufacturing process.
A total of 67,251 cylinders were found to be leaking posing a serious safety hazard had they gone into circulation.
This, however, seemed to be part of the grand plan to kill the project as then PS Andrew Kamau canceled the tender purchase order of 357,000 cylinders despite money having been paid out to East Africa Allied and Mohammed Jaffer.
The PS also canceled another purchase order of 700,000 cylinders with little explanation as to how the total budgetary allocation that had risen to Ksh2.9 billion had been spent.
This necessitated Consumers Federation of Kenya (COFEK) to sue Government in October 2018.
COFEK told court the Government’s ambitious program to buy and supply 5 million subsidized gas cylinders to low- and middle-income households by end of 2019 were in jeopardy as 60% of the cylinders delivered were faulty.
As Kenyans continued wondering why the Gas Yetu project is not taking off despite the immense benefits it would have afforded them, a new player in the market was beginning to emerge.
With its bright pink colored cylinders, Jaffer’s Pro Gas was starting to penetrate into the market offering gas cylinders at cheaper rates than competitors.
Pro Gas with the help of Energy CS Charles Keter, PS Njoroge and other corrupt government officials at the Energy and Petroleum Regulatory Authority (EPRA) and Kenya Revenue Authority (KRA) continue to engage in illegal and unfair trade practices to gain an edge over competitors.
Through use of intimidation tactics and sabotage, Pro Gas has been hiring thieves in hoods to steal cylinders from competitors resulting in millions of shillings in losses.
On June 20, 2019 at Southernsun, Mayfair Hotel in Nairobi, members of the LPG Cylinder Exchange Pool lamented the unfair practices by Pro Gas. Minutes of the meeting also indicate that members voted for pricing formulas with majority preferring cylinder cost minus validation cost to remain competitive.
However, EPRA went against the norm and published new rates. In a public notice issued July 25, 2019, EPRA announced a new deposit rate of Ksh2,170.03 for the 6kg cylinder and Ksh 3,588.86 for the 13kg cylinder.
These rates according to members of the exchange pool are in bad faith and are bound to resort in massive losses.
Despite numerous complaints to EPRA, no action is taken against Pro Gas.
Exchange Pool members now say they have evidence that PS Njoroge has been receiving Ksh30 million monthly in bribes while other officials at EPRA led by the Director-General Robert Oimeke pocket not less than Ksh10 million each month.
This is also the case at KRA with senior officials receiving millions of shillings monthly to turn a blind eye to Jaffer’s indiscretions.
The tycoon has also pocketed a significant number of MPs ensuring that any parliamentary committee investigations go his way.
To date, there have been more than five investigations on the unfair monopoly by his companies including Grain Bulk Handling Limited (GBHL) but no action has been taken.
Through bribery, Jaffer has now completely taken over the imports, distribution and retail business in the LPG sector undercutting other companies and driving them out of business altogether.
Suits filed in Court against Pro Gas, Energy Ministry and EPRA are often thrown out as he bribes witnesses and threatens anyone who comes in his way.
Photos taken at the main Pro Gas yard in Kabati shows they have been stockpiling the stolen cylinders there from where they are washed, repainted and rebranded into the signature bright pink color. They are then refilled and distributed to Kenyans at very low prices dealing a huge blow to competitors.
In every business, for it to curb all loopholes expected ,then it must have competitors, they will drive towards providing the best services to be business of choice, but with the current gas monopoly, we consume without alternative, government kindly, let's #EndGasMonopoly pic.twitter.com/HIukVfAzbK
— Bevalyne Kwamboka (@bevalynekwambo3) September 4, 2019
— unknown kenyan (@TrumpNicho) September 4, 2019
— Le DaviE™ (@_idaviee) September 4, 2019
In October 2018, at the height of the Gas Yetu scandal, DCI George Kinoti said he will begin investigations into the loss of billions.
“We will initiate a probe. We cannot allow a program that is funded by taxpayers to put Kenyan citizens at risk,” said Mr Kinoti.
Almost one year later though, no investigations have been done and no one has been taken to court over the scam raising questions about how many agencies are on the take from Mohammed Jaffer.
It is due to this reason that Kenyans flooded the platform with tweets demanding that the government cracks the whip on those involved in the death of the project that would’ve been benefitted millions.
Here are a few tweets from the online discussion sampled below.
The monopoly is one of the reasons why there are too many sub standard LPG products in the market. #EndGasMonopoly
— The African Voice (@teddyeugene) September 4, 2019
What will it mean for common mwananchi if the government #EndGasMonopoly? They will easily afford to buy and refill the gas at a very affordable price
— Le DaGi™ (@am_dagi) September 4, 2019
There are always some people who take opportunity to make others suffer#EndGasMonopoly
— Le DaviE™ (@_idaviee) September 4, 2019